RE:Big QuestionsIt is an easy answer: They have good lawyers. $50 million legal funding would hire a great team of lawyers. I've never seen 100,000-for-1 reverse splits undertaken on Wall Street, Bay Street or Howe Street - 300 million old shares reduced to 3,000 new shares.
Shareholders approval for any rollback or consolidation of shares would normally be required. But, Pacific E & P (PEN) had court-sanctioned protection for its restructuring. Because it was done under CCAA legislation, shareholders had been thrown under the bus. PEN could have cancelled all shares and start a new coporate entity from scratch. Why they didn't do that is because it would mean they have to raise funds vs. getting DIP from Catayst. Taking that route would mean 2 or more years of paper work to bring out an IPO with expected regulatory delays and exorbitant costs entailed.
The Company's market valuation was about $15 million (300 million shares x $0.05) during the CCAA end stage. After re-listed by TSX, it is now worth over $2.6 billion (50 million shares X $53). Same Company, same assets. Something is rotten here.
No cause of action in suing - aside from perceived conspiracy theory - unless some wrong or fraudulent acts can be proven. The management followed the IFRS guidelines and took $5 billion wrtiedowns putting the Company in a $3 billion deficit hole by wiping out $2 billion of existing equity in one fell stroke.
Stay away from PEN.