I own common stocks of the old CIT Group. After the restructuring plan, they wiped out all old common stocks. Do I have an option to go to court to get shares of the new CIT. The company never went bankrupt. It only filed for chapter 11. Thank you.
Asked on 12/10/09, 8:00 pm
1 Answer from Attorneys
Warren Markowitz
Warren R. Markowitz, Esq
If the company issued new shares under a chapter 11 reorg, then the old shares are worthless. If you didnt receive shares in the reorganized company then you have no interest in the new one.
Chapter 11 is bankruptcy, it is for the purpose of reorganizing a business, in this instance it appears that the secured or senior debt holders took control of the company and wiped out the original equity owners.
If you are going to court, you're going to need deep pockets and and reason why the reorganization was not proper.
Good Luck.
Answered on 12/19/09, 8:24 pm
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