Arch Coal Inc (OTCMKTS:ACIIQ) Shareholders Need To Read This Now

Mid-June, Arch Coal Inc (OTCMKTS:ACIIQ) announced it had filed an amended plan of reorganization, and that it would be restructuring under chapter 11. The announcement didn’t go into any real detail on what the plan would involve, only stated that the proposition would go in front of the US Bankruptcy Court in Missouri on July 22. This date just passed, and the court in question has accepted the disclosure statement associated with the restructuring. The company is – justifiably – down a considerable amount on these events. Ahead of the Monday open in the US, however, it's up nearly 10%, and has nearly doubled since July 8.The first question is, who is buying the stock? The second, why?We don't know the answer to either of these questions, but bottom line, nobody should be buying Arch Coal right now. We're not giving advice here, just stating the fact that whatever it's market capitalization (circa $10 million as of last close), it's stock is essentially valueless.Why?Well, the restructuring deal essentially wipes out any common stock. Take a look at some of the latest communications:

"What will happen to the Arch common stock that I own? Will I receive any compensation if the stock is cancelled?Arch’s agreement with the majority of the company’s senior lenders provides that, upon the company’s emergence from Chapter 11, Arch’s existing stock will be cancelled and the senior lenders will receive the substantial majority of the new stock in the reorganized Arch Coal."

So the current stock is going to be cancelled at the conclusion of the chapter 11. The question format here suggests that there's no guarantee this will happen, but it's misleading. If chapter 11 goes through any outstanding stock is cancelled. This said, there will surely be some sort of issue of fresh, restructures stock that compensates current shareholders?Nope.

"Any recovery to existing stockholders will ultimately be determined in connection with the company’s Plan of Reorganization upon emergence from Chapter 11. We do not expect existing Arch stockholders to receive any recovery at the end of the restructuring process."

This latter statement is repeated throughout the communication in response to various questions about what's going to happen to current holdings.The company is delisted, and hasn’t even confirmed it's going to trade publicly OTC. Communication suggests it might, but there's no guarantee. Even if it does, it will be a different entity altogether. Perhaps not from an operational and asset standpoint, but from a trading standpoint. New ticker, new shares.The key point to realize here is that the company's stock in its current format is not just worthless from an analysts' perspective. It's got nothing to do with how well, or not, the company is performing. We're not even going to discuss fundamentals or operations here because they don't matter. There's an expiration date on ACIIQ shares, and once that expiration date hits, they will be worth nothing.When will this happen? Well, these sorts of proceedings normally take between 12-18 months. After this period, the shares will be cancelled.So, who's buying? The fact that the shares will be cancelled is not hidden, as such, but it's yet to be released as a press release (it's only available on the company's restructuring documents here). The assumption is, then, that those buying now have no idea that they are buying worthless stock, and that it's simply a case of misinformation.We hope that this piece serves to keep our readers in the loop – within 18 months, at the outside, ACIIQ shares will be cancelled, and holders will receive no remuneration. Don't get left holding these pieces of paper when the cancellation date hits.For updates on ACIIQ, subscribe to our newsletter below!Disclosure: We have no position in ACIIQ and have not been compensated for this article.