Okay so I gave you time to expound upon your point that the only way for the common shares owned by Beechwood to be converted back into preferred would be for Klug to simply break the law, now I'm going to explain why that is not true using a purely hypothetical scenario.
Klug could decide that the OS is too high, and as the largest shareholder he is in the best position to do something about it. So he could create a new LLC that is owned by the company, with himself as the administrator but not the owner. The new LLC would hold zero dividend preferred shares, that were only convertible into common shares if they were used for an acquisition, in the event of a buyout, or to prevent a hostile takeover.
The LLC administrator would be given the right to buy the LLC and its preferred shares for some low preset price, in any of the three circumstances in which the LLC's shares were convertible except an acquisition. Then Klug could take most of the Beechwood shares, let's say 178 million of them, give them to the new LLC, and then as the administrator of the LLC convert them into the zero dividend preferred shares. Just one way to convert them back into preferred that is legal and protects Klug's interests, while reducing the OS.
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