would lose NOLs and possible tax refunds from any federal corporate income taxes paid-out over the past 5 years if common equity is canceled, thanks to the economic stimulus package recently passed a few months ago.
it is my understanding that the majority shareholders must continue holding their respected positions - which necessitates common shares remaining intact, in order to take advantage of the NOLs and possible sizable tax refund. Any change in major ownership structure by the liquidation of position in commons equity would result in a corresponding % reduction in the amount of NOL that could be carried forward and possible tax refund.
therefore it is currently very advantageous to keep common shares intact throughout completion of chapter 11 restructuring thanks to the recent legislation, provided there is significant NOLs and tax refunds available to exploit in a particular case (which seems to be the case in many nowadays).
this is one of the driving forces (multi BILLION $ tax refund) behind perceived recovery for common shareholders in WaMu's chapter 11 restructuring case.
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