In my personal opinion, the bankruptcy courts are one of the most corrupt institutions in our current system. I've seen it too many times.
The hedge funds and lawyers know how to work that system.
I owned a few shares of Eddie Bauer before they got purchased in a similar deal to what you are watching. I think I took a small gain on a DCB, but I didn't lose much.
OTOH, the banks (and lawyers) took all of the money from Aleritas, and never gave a clean accounting of the assets. It was thrown out of Chapter 11 because it was still a viable entity, they handed over 25 million to BONY (Mellon), and never said another word to shareholders. I own a million shares.