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by jacquesm 3102 days ago
Drag along clauses exist but typically require that the stock gets paid for, if you're going to play tricks with multiple stock classes you can find yourself in awkward positions when you wish to screw the 'lower classes'.
1 comments

Right. So, we may be able to infer that a drag-along doesn't exist or that the majority doesn't want to activate it, given that they are trying to offer zero to common, whereas a drag-along would typically require that all holders are treated evenly.

Also, the claim that the amount paid would go towards company wind-down makes you think that plan would be negated through a drag-along, as some of the cash would "leak" to common holders.

In fact, it's actually curious that they are the acquiring the company in earnest vs. just acquiring its assets. Not sure why they would acquire the liabilities to the tune of $500K just to shut-down. Just pay for the assets and let the company use the funds to shut itself down. But, who knows? Maybe there's something (like paying customers) that they are finding difficult to transfer as an asset for some reason.

All agreed. So, if you're holding common stock sit tight and don't sign anything, a better offer is likely just around the corner.