Quote from: NotLambchop on April 06, 2014, 06:57:36 PM

I'm not an expert either, but here's a start:

Quote

Upon bankruptcy, a firm will be required to sell all of its assets and pay off all debts. The usual order of debt repayment, in terms of the lender, will be the government, financial institutions, other creditors (i.e. suppliers and utility companies), bondholders, preferred shareholders and, finally, common shareholders. The common shareholders are last because they have a residual claim on the assets in the firm and are a tier below the preferred stock classification. Common shareholders often receive nothing at all, as there is usually very little left over once a firm has paid its debts.

http://www.investopedia.com/ask/answers/06/bankruptpublicfirm.asp

There are different types of bankruptcies (in US Chapter 7, Chapter 11, 13 etc., etc.) under Chapter 7, a debtor surrenders his non-exempt property, under Chapter 13 he retains it. It's not trivial stuff, and "bankruptcy" is just a catch-all term. Anyhow, no one filed for bankruptcy AFAIK.

This is much clearer and makes sense and sounds reasonable the previous SEC quote still makes no sense, but I guess we can live with it.

Quote from: NotLambchop on April 06, 2014, 06:57:36 PM

This presupposes actual shares, these shares don't represent partial ownership of Neo, but "shares of the profit.' This makes bankruptcy the worst-case scenario for Neo shareholders -- they are explicitly not entitled to any post-liquidation residual value.

Correct observation, which basically is why you should never buy profit-share only (a mistake I did once).