Reply #4: i'm sure they have smart lawyers, but i can't get the term "fraudulent conveyance" out of my mind...

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any way you cut it, equity holders getting paid ahead of creditors violates at least the intent of bankruptcy laws.
and any way of disposing of assets shortly before a bankruptcy filing is suspect and can be yanked back by a bankruptcy court.

like i said, i'm sure they've got it all figured out, e.g., the bankruptcy filing happens more than 90 days after the merger, it's harder to yank back.

on the other hand, fairly explicit statements prior to the transfer of assets that the intent was to remove the assets and leave the creditors with nothing in exchange is not something i would want to defend in court.