Replies to post #314522 on Spongetech Delivery Systems, Inc. (fka SPNGQ)

[flptrnkng]

The creditor's committee doesn't give a whit

about common shareholders. They will be the first thrown under the Spongetech bus.

Last in line, and someone has to lose. That's just how it goes in BK court.

Regards

[starfire]

In SPNG's case, common will survive as there is no 'debt'...Preferred, notes payable, bonds, convertible notes , etc. If it files for BK, it will be for securing WC and paying of the most critical liabilities. As the company is growing, securing WC from ABLs should not be a problem as long as the assets are of Quality. Most serious concern I have is unpaid salaries as this will hinder production and hence growth.

[themanfromboston]

you do understand that the original stockholders have no say in the Creditors committee don't you?

so all the negotiations go towards how the Creditors are going to be paid and not how much equity the original stockholders are going to end up with. And part of how the Creditors are going to be paid is to end up with most of the stock in the company, reducing the percentage ownership by the original stockholders significant, and sometime wiping them out to a less than 5% ownership of their original percentages.

Maybe, maybe not. The Creditor's Committee has more power than the judge. The judge is just looking for fairness, an accurate assessment of the facts and a common agreement among all the parties.