Buyouts
A buyout occurs when another company buys the bankruptcy business and absorbs it. The bankrupt owners are often glad to have a buyer, which allows acquiring corporations to negotiate for lower prices. After a buyout, stockholder position is determined largely by the actions of the buyer. Buyers may transfer stock in the old company into their own stock. The transfer rate may not be good--several shares of old stock may be traded in for the buyer's stock--but the stockholders have a small return. Other buyers may buy all stock of the old business for a fraction of its price.
Cancellation
In a worst-case scenario, the company's stock will be canceled. This can occur if a buyer does not want to deal with the old shares at all, or if the Chapter 11 was unsuccessful and the business cannot keep operation. Chapter 11 often leads to Chapter 7 bankruptcy and stock cancellation. In this case, stock continues to trade for a short time but is ultimately ended. Investors who cannot sell their shares lose their money.
Risk
Stockholders also lose when it comes to risk in a bankruptcy. For a Chapter 11, the court may require the business to pay back primary creditors. This will certainly happen if the business files Chapter 7. But stockholders do not benefit from this arrangement. First the business will pay off large lenders. This usually takes all the funds of a failing business. Next, if any funds are still available, the business will pay off bonds. Stocks come last, and although preferred stock is paid out before common stock, the business will rarely have any funds left to allow stockholders to recover their losses.
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So far from what Ive seen and read, it looks like AONE is doing what they can to dodge the bullets listed above- filing for Chpt 7; If Wax does win the bid for the company, I cant see them cancelling the common stock since they own so much already and with the court granting AONE to continue with opperations at the plants (giving paychecks, insurance still good) it seems to me that chapter 7 isnt being considered.
I held all my shares today and have been watching the L2 now for close to 6 hours. I actually wired in another 2K into my account if I felt it was a good time to "pull" the trigger and buy more. I think we may see a dip at 230, if the chart holds true to the past couple days, and then finish on a HOD in power hour. If we can break the 0.155s mark, we fly into the 16s and then on to the -18s it looks like. But who knows how many of the MMs will repost with a higher ASK then what the L2 is showing now.
