[dlss]

Usually things like preferred stock and senior bonds are used to protect shareholders from bankruptcy, rather than acquisition.

When you issue stock to someone, you accept a fiduciary responsibility for increasing the value of those shares to the best of your ability. That fiduciary responsibility includes siding with their interests if and when a conflict of interest arises.

If the founders really did receive a large pay day while taking the value of their non-preferred stock to zero, then it sounds like that fiduciary responsibility was ignored.

So yes. Sleazy is an appropriate word.