get over it, APR *is* being followed inasmuch as APR can be followed and still allow Commons to exist at all. Be grateful.
I've said it before, this is an approximation of APR. In order to keep company ownership intact for NOLs, Commons must survive, but since there's not enough liquid cash available to pay off Preferred shares in full, they had to get creative and split new ownership. Clearly, Preferreds got the better deal when it comes to the ratio of ownership, and this is a direct testament to the implications of the APR.
If ARP were followed strictly, Commons would get zero. I cannot emphasize that enough. Commons would be wiped out and Preferreds would get 100% of the company. But, then the validity of the NOLs would be called into question, and that would destroy the ability of the company to emerge as a meaningful enterprise, so they decided to just go ahead and take a small haircut and a deferral of recovery for the benefit of all.
If APR were not a consideration, why the 70/30 split? Why not just convert preferreds to WAMUQ now and convert everyone in one giant pool? Simple: because that would completely violate the APR and would have the effect of treating both classes the same. They have to at least give some consideration to it or the judge wouldn't let it fly. I think she will be satisfied that this gives Preferred classes enough of a consideration for their claims to allow the settlement, even if it doesn't follow the letter of the APR... it certainly follows the spirit of it.
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