Maybe Mordacai can help resolve this issue, but I don't believe they have a choice regarding the commons. The commons represent an ownership interest. If the company is worth something (assets > debts) then the commons have value. Canceling would be like stealing.
But if the company is not worth something (assets < debts) then the commons lose out. I believe under this scenario, shareholders must lose all before creditors lose any.
So these shares may become worthless during the bankruptcy process, but it's not a choice some lawyer or executive makes.
The following is mordicai's first post on the WMI board. The other one I posted was his post on the Wachovia board on the same date however he does mention WAMU in the other post.
Posted by: mordicai Date: Saturday, September 27, 2008 6:03:13 PM
In reply to: seabiscuit who wrote msg# 1972 Post # of 122560
Although this would fall under the category of an emergency seizure to protect the deposits, I would presume there is some kind of post seizure appeal available to WaMu (or now the bankruptcy trustee) to contest the seizure altogether on whatever grounds. I am not saying any such appeal would be made or would be successful --- just that the due process clause dictates some type of hearing if this was just sprung on WaMu without advance warning. Here is a link to the law if anyone is interested in finding a definitive answer.
Market Data 
Markets 
AI
