Replies to post #4001 on Foresight Energy LP (fka FELPQ)

[WHITTENHALLJR]

Can you tell which shareholders bought prior to the queue with the other symbol does that matter with regards to what you’re talking about?

[SPM555]

Let's restate our conversation.

Wintolose stated this:

General Motors, United Airlines, and thousands of other corporations of all sizes in past have filed chapter 11. I’m not worried the least bit. We will be coming out of this stronger !

To which I replied that both of his examples were cases where the old shareholders got screwed, as is overwhelmingly the case with chapter 11 bankruptcies.

Then you replied to my post with this:

The existing shares as you mentioned were cancelled, but the company did 1-1 and also 2-1 with old company shares to new company shares

Which I took to mean you were referring to the UAL and GM instances, which was not the case. Old common shareholders got nothing. Now maybe you were referring to instances not pertaining to UAL and GM, but that didn't seem to be the case.

Next you replied mentioning HealthSouth was an example of one of the Chapter 11 plays that you played that emerged salvaging the old shareholders. I don't know all of the details but I do know that HealthSouth never officially ended up filing for bankruptcy, so even if this was a 'success' for old shareholders, it's still not an example of a company that filed chapter 11 and old shareholders weren't screwed.

The point I was and am trying to make is that when a company files chapter 11, the overwhelming majority of the time the old common shares are canceled and common shareholders get nothing. Sure it's possible but highly unlikely, in fact it's so uncommon that we still don't have one example being posted. In the end all I was doing was contesting the original statement that was made about GM, UAL and how common it was for a company to file for BK and for shareholders to emerge just fine.

Chapter 11 is a death knell for common shareholders the vast majority of the time and there's a reason why the market repriced $FELPU at a 90% haircut and why there is no liquid market left for it down here today.