Litigation Claimants and Chapter 11 Reorganization
AFFY's 2012 10-K discloses that its insurance policies may not cover its litigation liability both for the pending class action claims and for anticipated products liability claims. No BFP will want to buy AFFY and have to resolve so much litigation. The solution, of course, is for AFFY to reorganize where a portion of its value is set aside for litigation claimants. Then whoever wishes to buy AFFY's assets in a bankruptcy sale obtains the assets free and clear of any litigation claims. Shareholders, of course, are left holding the empty AFFY bag. Be advised.