Jonathan: Re Iomega purchase of Syquest assets out of bankruptcy court:
When Syquest filed Chapter 11, a bankruptcy estate was created for the purpose of accumulating and disposing of assets of the company to eventually pay its creditors pro rata based on a classification system governed by the Bankruptcy Code. There are so-called "priority claims" in bankruptcy, such as employee wages and taxes. Those are paid first. Then, the remaining creditors, such as trade creditors, stock and bondholders, leaseholders, etc. are placed in various classes and paid to the extent that assets remain, under a plan of reorganization and/or liquidation, whichever the case may be. Post-petition fees of the bankruptcy professionals; i.e., debtor's attorneys, creditors' committee attorneys, accountants, appraisers, etc. are also paid from the estate.
It is important that you timely file a notice of appearance and a proof of claim in the bankruptcy case to ensure that your claim is recognized, and so that you receive notices and copies of pleadings which will advise you of the status and progression of the case. You can obtain a proof of claim form from the clerk of the bankruptcy court where the case is filed. You probably would want to obtain a copy of the proposed plan of reorganization when it is filed and read it to determine how your claim is classified and what payment, if any, is proposed for that class. If you believe that your claim is not being treated appropriately under the proposed plan, as an interested party (creditor), you may file an objection to the approval of the plan and be heard at the confirmation hearing.
If Iomega proposes to purchase assets from Syquest's bankruptcy estate, such as intellectual property, hard goods or whatever, a motion to approve the sale containing its terms will be filed and the creditors and Chapter 11 trustee will have an opportunity to object and be heard at the hearing if they feel the purchase price is not adequate or that for some other reason, such a sale is not in the best interest of Syquest's creditors.
If I had 25,000 shares of Syquest, I'd monitor the bankruptcy case and certainly read the plan of reorganization when it is filed to determine how my claim is proposed to be paid. |
