if we wind up doing well as F and F (some positive form of recap and release without too much dilution) .... then combining F and F in those type cases into say FF (positive outcomes by nature of what the "remainder is") should have near zero impact ..... F and F share holders will each get pro rata shares in FF
I can think of two likely outcomes of a merge into one. One option is the usual one where the equity in the new company is split between shareholders in the old company. It wouldn't be 1:1, but should be "fair". Most likely senior preferred would be paid off (or whatever that term was Rek) and junior preferred would get "equivalent" value in shares of the new company.
The other option is to liquidate the two old companies, and "sell" the assets (mostly the loan portfolio and software) to the new entity. The new entity would do an IPO to pay for the assets they just bought.
Shareholders in the old companies would get proceeds from liquidating the assets of the old companies. Theoretically with zero net worth the common shareholders would get zero and the junior preferred and senior preferred would be fully paid. "Theoretically"