There are an infinite number of ways that common stock (and the associated options) can be rendered worthless in acquisition or winding up a company.
Simplest way is to sell the company for enough to pay off preferred shareholders, and use "personal service contracts" to compensate insiders. They get paid well, shareholders get zero.
Most of them would not stand up to a lawsuit, but if you suddenly have no money coming in, are you going to be willing to pursue an expensive, years long legal process?
Simplest way is to sell the company for enough to pay off preferred shareholders, and use "personal service contracts" to compensate insiders. They get paid well, shareholders get zero.
Most of them would not stand up to a lawsuit, but if you suddenly have no money coming in, are you going to be willing to pursue an expensive, years long legal process?