The problem I have with the preferred shares are the super-voting rights it takes along with it. The real concept behind taking a company public is that whoever holds the most shares is in control of the company. The fact that the CEO converted his loans to preferred shares with super-voting rights means that there's no chance that investment in BRAV will mean ownership combined with control. I know it's not feasible and a bit far-fetched, but if someone went out and bought 100% of the outstanding shares of BRAV, that person would STILL not be in control of the company. Isn't that crazy????!!!!
Could the CEO simply converted his shares to preferred stock WITHOUT super voting rights? sure.
It's a pretty crappy thing to do, IMO (that means "In My Opinion")
Of course, the counter-argument here is that it was done out of the goodness of management's heart so as to not increase the O/S. Some may believe that.
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