A123 Systems fka AONEQ

[Renee]

When a BK company sells substantially all of its assets under Chapter 11 Reorganization the company must decide whether to submit a PLAN of Reorganization detailing their going forward business PLAN, or the company and Trustee must ask the Court to change the Chapter 11 Reorganization to a Chapter 7 Liquidation.

If A123 were to reorganize and continue any type of business operations the Secured Creditors would require the common equity to be cancelled so that NEW equity could be established as collateral for their remaining secured debt. The present equity would be considered burdensome to any PLAN of Reorganization and the BK Judge would grant the Secured Creditors request.

If A123 and the Trustee move to have the Chapter 11 Reorganization converted to a Chapter 7 Liquidation the common equity would be cancelled.

In either instance the common equity will be cancelled, particularly since A123 has already stated the common equity will have no value.

There was a similar type of BK in 2009 with a U.S. cornerstone company, LandAmerica. Although the company was under Chapter 11 Reorganization once they sold all of their assets the company was dissolved by the BK Judge and the 15 million Outstanding Shares were cancelled.

I have included the I-Hub link so that AONEQ readers can peruse that stock board for any similarities between the 2 companies.

Please read the sticky note as to the Judge's final decision regarding the common equity.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=42393114

http://investorshub.advfn.com/LANDAMERICA-LFGRQ-14622/