You said (and again I quote): "All the old shareholders lost everything."
ALL?? Does that include Jerry Griffith? And I'm sure you are talking about the PRIVATE company, am I right? Because Grifco was not a PUBLIC company at that time! So, whatever shareholders it had back then were private shareholders.
And no, you are absolutely right! I have no clue about how private corporations work. I only happen to work for a $32 Billion public one!