[ConstantineXVI]

The shutting down/new company business is essentially a convoluted form of bankruptcy[0] that allowed them to keep the lights on; out of context it looks bad but it could have been much worse.

[0] http://en.wikipedia.org/wiki/General_assignment (note this technically/legally isn't bankruptcy, but has a rather similar effect)

[zizee]

I don't know the full situation, but if each of those who were laid off owned part of the company it seems a little unfair for the majority shareholder to be able to sell the company to himself, leaving everyone else with nothing. What should have happened is that the company should go up for auction and the proceeds split by percentage owned.

[sp332]

They didn't own stock in the company. They had stock options which were cancelled. Which is just as well maybe since they would have also owned a piece of the debt.

[wmf]

You're forgetting liquidation preference.