CHAPTER 11 Question

[waxweazle]

So im in at KLUCQ! This company had very good Q!!! and will get out of chapter 11 when tehy get out what happend with my stocks that i own in???

[Quasi]

So im in at KLUCQ! This company had very good Q!!! and will get out of chapter 11 when tehy get out what happend with my stocks that i own in???

Well been there done that, happened to me a few times, ususally I just get out early when I still can with a little cash back and realizing the loss.  These companies often survive but only in name, they write off debts, pay off bond and note holders in order of level of security, usually the existing usecured stockholders get wallpaper (if you wanna buy the actual certificates from your broker).  New finance money comes in and they are issued new stock.

I took a quick look at Yahoo link below SEC filings and the above seems to be pretty well the proposed case.   http://biz.yahoo.com/e/060511/klucq.ob10-q.html


down about a page or two
.............
"The Kaiser Aluminum Amended Plan, in general (subject to the further conditions precedent as outlined below), resolves substantially all pre-Filing Date liabilities of the Remaining Debtors under a single joint plan of reorganization. In summary, the Kaiser Aluminum Amended Plan provides for the following principal elements:
(a) All of the equity interests of existing stockholders of the Company would be cancelled without consideration.

(b) All post-petition and secured claims would either be assumed by the emerging entity or paid at emergence (see "Exit Cost" discussion below).

(c) Pursuant to agreements reached with salaried and hourly retirees in early 2004, in consideration for the agreed cancellation of the retiree medical plan, as more fully discussed in Note 10 of Notes to Interim Consolidated Financial Statements, KACC is making certain fixed monthly payments into Voluntary Employee Beneficiary Associations ("VEBAs") until emergence and has agreed thereafter to make certain variable annual VEBA contributions depending on the emerging entity's operating results and financial liquidity. In addition, upon emergence the VEBAs are entitled to receive a contribution of 66.9% of the new common stock of the emerged entity.

(d) The PBGC will receive a cash payment of $2.5 million and 10.8% of the new common stock of the emerged entity in respect of its claims against KACOCL.  etc etc ............"

I would expect that todays action is just the shorts closing out there positions while they can still buy the shares.

You probably need to do a little more research to get the official story, then decide what you need to do.  But this is the case that I have usually experienced in these situations.

Good luck,

Quasi