Holders of the existing equity interests in SFI (both preferred and common) (collectively, “Old Interests”) shall receive no recovery. Such Old Interests shall include any options, warrants or other agreements to acquire or be issued any Old Interests (whether or not arising under or in connection with any employment agreement), including without limitation, any claim against the Debtors that is subordinated pursuant to section 510(b) of the Bankruptcy Code, which shall include any claim arising from the rescission of a purchase or sale of any equity interest, any claim for damages arising from the purchase or sale of any equity interest, or any claim for reimbursement, contribution or indemnification for such claim. http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=6657063
That's what will happen if the plan as proposed by Shapiro is approved. His comment today about Snyder putting in additional capital post bankruptcy may not go over well with the court. It is probably a side deal with the lenders. If he is going to do it, why not do it in bankruptcy? Bring in new capital and instead of giving the banks 92% for their $550 million, he could take a piece of the $550 million. But what do you want to bet that the deal will be to buy 50% or more of the outstanding equity for far less than 50% of the conversion price?
Is it possible that the public company may survive? Yes. And so the trading will go on until the court rules the case discharged when the stock will just evaporate (if that is the final decision).