I've been getting a lot of questions from people about what happens to MAG's stock during bankruptcy.

Disclosure: I no longer hold MESA and sold prior to bankruptcy. (Up $600, Beer Money! ).

MESA was unable to meet the listing standards of NASDAQ and was delisted. The stock continues to trade on the OTCBB or "Pink Sheets". The stocks are still trading on the off chance they'll have some worth after reorganization. Think of it as legalized "off track betting ".

Buying a bankrupt company's stock is very risky. Normally, reorganization plans cancel existing equity shares. In bankruptcy the secured creditors are paid first, then the bondholders, and lastly the owners (stockholders). The company's assets are used to pay off debts in that order. If all the assets are used to reorganize then the stock will be worth $0. Depending on the outcome of the litigation cases and the needs of the creditor's and bondholders MAG may or may not have any assets to put towards the common stock.

This is where it gets tricky. Occasionally, If the company does well under reorganization and comes out of it in the end with some assets then the company may have two stocks: Old Common Stock (prior to bankruptcy) and New Common Stock. The Old Common Stock is currently trading under the ticker symbol MESAQ (Q indicating bankruptcy). After a successful reorganization, and if MAG plans to reissue, the New Common Stock will be listed for a time as MESAV (V indicating "stock to be issued"). If issued the ticker becomes MESA.

If all the cash and assets are used during the bankruptcy process then the stockholders get nothing. If there are some assets or cash left over then the trustee may allow stockholders to negotiate for an exchange of new stocks, bonds or a combination. The stockholders will get a copy or summary of the reorganization plan and disclosure statement and possibly a ballot to vote on the plan. It all depends on the asset/liability ratio at the final outcome and the negotiations amongst all parties. At this point there are many roads this bankruptcy reorganization can take with the biggest unknown being the Delta litigation.

If you currently hold MESA stock, and after reorganization the liabilities outweigh the assets, then there is a good chance the stock will be worthless. On the other side of the coin, if MAG comes out in the end with some assets and the negotiations favor the stockholders then those who bought MESA for pennies may possibly have a windfall. Stockholders will have a good idea where they stand when the final plan is submitted but won't know the final outcome until the plan is confirmed.

Too risky for my payscale but at pennies a share (MESAQ.PK) it may be hard to pass up for some people...

Good Luck,

winglet