I know they are not required to. The simple fact is they still have to pay 100% of there debts in order for it not to affect the shareholders and even if they wanted to, they can not. If they could do that they would not need to file.
Claims of people and entities that are owed money come first.
Stockholders come last if at all. Preferred Stock owners, if any, come before those who
own the common shares. The order of priority for claims is approximately as follows:
Taxes owed
Wages owed
Trade Creditors (suppliers etc., if the company is to continue operating)
Bank lenders, Commercial Paper and Bond holders (order depends on the relative
strength of covenants in each document)
Preferred stock if any
Common Stock IF AT ALL
In a very high percentage of cases (well upper 90s!) the common stock of the old
stockholders is wiped out. It is valuable only as a souvenir or as wallpaper. If the
company emerges from the bankruptcy process as a continuing going concern, it will
issue new common stock.
I can not think of one (I know there are some though) chap 11 company with the exception of Texaco in 1987 where the common shareholder was not wiped out.
I hope the best for everyone who has spent money and many hours on this stock, but I will not let myself continue to bleed over it. I will probably sell before the end of the year for a tax loss. If there is any hope I think it will come from a shareholder committee, if there is one. They might persuade the judge not to grant them the chap 11 and they can take the money they have a pay Annon. They can then look for money the same way they always have.
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