The note holders were willing to accommodate the preferred stockholders with a small piece of the proceeds, but would not share the proceeds on a pro rata basis.
Under the plan, noteholders and preferred stockholders swapped their securities for new notes and 95 percent of the new common stock in the reorganized company.
Cumulative preferred stock requires that any past, omitted dividends must be paid to the preferred stockholders before the common stockholders will be paid any dividend.
