It depends. Creditors above us are entitled to more but if we receive pro rata shares even to the tune of %5 of a new entity, its still a very nice payday. If this is what happens then i will be very happy as im sittin on a ten bagger elsewhere with time to add.
It is impossible to know if it would be 1 for 1 or 1 for 10. What would be the working Capital? What would be the Equity?
You are asking complex questions on a hypothetical that I think is way too early to speculate on.
In the WAMU bankruptcy the Equity Commons are to receive $ 57 M in New Stock and yet there are 1.8 B in O/S.
I suppose if the WAMU Debtor wants the New Stock to have a market value of $ 1.00 a share then the Debtor will have to distribute 57 M worth of shares at a swap of about 1 for 30.
If the WAMU Debtor did a 1 for 1 swap then the O/S of the New Company would be too high at 1.8 B and the market value would only be about .03.
What is the O/S of the Lehman Common Stock? If it is too high for a New Company then it may be reasonable to expect a 1 for 10 swap.
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