Orchard Supply Hardware Stores (OSH, OSHSQ.PK), a neighborhood hardware and garden store, said it expects that its equity holders will experience a complete loss of their investment as a result of the company's Chapter 11 bankruptcy proceedings.
The company noted that its management has noticed high trading volume in the company's Class A Common Stock and Series A Preferred Stock following its filing of Chapter 11 with the U.S. Bankruptcy Court on June 17, 2013.
The company said in the statement that stockholders of a company in Chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, the company's management strongly believes that it is highly unlikely all such claims will be fully satisfied.
On June 17, Orchard Supply Hardware Stores announced an agreement through which home improvement retailer Lowe's Companies Inc. (LOW) would acquire the majority of its assets for $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners. To facilitate the sale and restructure its balance sheet, Orchard has filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware.
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