The once-trendy, San Francisco-born coffeeshop chain Philz Coffee has struck a deal to be sold off to a private equity firm for $145 million, but any employees who bought stock are getting the shaft, as they won’t see a penny of that money.
Reading into this it’s likely a distressed asset sale, a bankruptcy in all but name. They’re toast and they know they’re toast, but instead of bankruptcy they sell all the assets. They then use the money to pay off in order: wages, debts, preferred shares, common shares. Sounds like this is preferred over bankrupty, which when you get the courts involved is expensive and time consuming (so fewer debt holders get their money).
Reading into this it’s likely a distressed asset sale, a bankruptcy in all but name. They’re toast and they know they’re toast, but instead of bankruptcy they sell all the assets. They then use the money to pay off in order: wages, debts, preferred shares, common shares. Sounds like this is preferred over bankrupty, which when you get the courts involved is expensive and time consuming (so fewer debt holders get their money).