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Technology Stocks : Silicon Graphics, Inc. (SGI)
SGI 79.57-0.7%Nov 5 3:59 PM EST
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To: Jatin Kadakia who wrote (14368)5/8/2006 6:30:12 PM
From: R2O  Read Replies (2) of 14451
 
Look like end of commons.

I don't think the CEO or even the board can just fiat common to go away. I believe it takes a court order, hence the filing.

Shareholders still own the company, subject (in SGI case) to many agreements, contracts, covenants, etc already used as collateral e.g. all the IP (http://tinyurl.com/kx8n7).

In addition it is (I think) common that agreements, etc. made in anticipation of bankruptcy can be reversed by the court e.g. forgiveness of loans, incentive contracts to CEO, sweetheart deals with 'certain secured creditors' (Shhhh ... secret stuff here). I would think anything done after last fall would come under that heading. Once they are controlled by the court, however, McKenna will be able to do just about anything (with perfunctory court approval, of course).

I think Mr. McKenna should stop thinking of himself as president of some secret society and be completely open with the owners ... or else I would guess that Sarbanes will have him sending season's greetings from the pen. Just a whisper in Spitzer's ear ... Just having the 'going concern' warning absent consistent supporting statements or events wouldn't seem sufficient notice to shareholders.

If anybody knows any better about these matters, please set me straight.
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