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Microcap & Penny Stocks : SEXI: Mostly Fact, A Little Fiction, Not Vicious Attacks
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To: michael d kugler who wrote (6978)11/12/1996 9:47:00 PM
From: Stuart Briscoe   of 13351
 
Michael, why would a chapter 11 be bad for existing shareholders? Chapter 11 is a reorganization that protects the company from creditors, and other liabilities (including lawsuits) until such a time as profitability returns.

If there were, for instance, some sales pending but not enough funds to build inventory, an arrangement could be worked out to give the "white knight" several options: (1) a percentage of those sales (2) ownership in company (3) set interest amount, or a combination of all three.

Legitimate sales orders waiting to be filled by 1st generation, 2nd generation, or whatever rendition you want to assume, products is like money in the bank.

If any of this hypothetical scenario could exist, wouldn't you want SOE to try their best to arrange to fullfill those orders? If it took SOE 6-12 months to get back on the right track and emerge from some form of Chapter 11 or whatever, at least there would eventually be funds to settle any class action suits. I would think this the better scenario to hope for at this time for existing/former shareholders.

Seems like quite a number of major airlines went the Chapter 11 route at one time or another in order to save the company and any hope of future profitability.

Just some thoughts.

Regards,

Stuart
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