The moment that we casted the release had no idea of the return in $$. According to the market information from the debtors, preferreds was only covered by 1% of the FV. Under these circumstances, why the holder of preferred allowed common to participate the newco in shares and escrows. Common should be wiped out according to the waterfall.
However, some one had the inside information and knew the return would be huge, i.e. those dirty 4 HFs. Therefore, after negotiation, it came out the formula of 75/25 split from everything come back to LT.
Also, in all documents, you have no place showing that preferreds only get face + interests.
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