No it doesn’t. Nobody gives up preferred stock for money during the course of a suit. That’s stupid. If you have to give up money because of a suit the other side isn’t going to give you stock for it, and if you have to give up stock in a suit the other side isn’t going to pay for it.
Think again.
http://www.allbusiness.com/banking-finance/banking-lending-credit-services-letters/6915992-1.html
Gradco Systems Inc. (Nasdaq:GRCO) Thursday announced that the settlement of the litigation between itself and John C. Hamma and Tenex Corp. has been completed.
Pursuant to the agreement executed Thursday Gradco agreed to pay $5 million. Three million dollars was paid with the execution of the agreement and $1 million is to be paid in each of the next two years without interest, secured by a letter of credit. In addition, the plaintiffs received five-year warrants to purchase 250,000 shares of Gradco stock at $4 per share.