Here's All You Need To Know About Republic Airways Holdings Inc (OTCMKTS:RJETQ)

Here at Insider Financial, we try our very best to say what we see. Sometimes, this means highlighting a stock as a potential high reward opportunity going forward. Sometimes it’s the opposite.Today we're going to highlight a case of the latter. It's never as entertaining, but it can be the difference between an investor who may have missed key point (and in the scenario we are about to discuss, it seems as though many have) losing a bunch of money, and that same investor keeping hold of his or her capital.Here goes.The company is Republic Airways Holdings Inc.(OTCMKTS:RJETQ).Before we get started, it's worth mentioning that this is in no way content suggesting that Republic Airways is heading for trouble, or up, or otherwise. We’re not even really going to look at the company in much detail – it's merely a capital structure case.With this said, however, and by way of a bit of background, it's worth recapping the situation in which the company now finds itself, and why it's got that dreaded Q tagged on to its ticker.As many will already know, it's an airline company that serves as a sort of back up carrier to major carriers, including Delta Air Lines Inc (NYSE:DAL), United and more. These sorts of regional carriers take on the short haul flights, generally carrying between 70-100 passengers, between small city airports. It's not small business, however – pretty much half of the commercial flights made in the US annually are regional carrier flights.Republic is one of the biggest in the business, but it filed for Chapter 11 early this year citing – and this is going to sound odd – a lack of pilots. Basically, the company couldn’t get enough pilots to fill its contracts with the big names, and was set to incur heavy fines from cancelling the big name contracts that it couldn’t run. It filed for Chapter 11 in the hope that it could then take these cancellations to court, and get itself out of the agreements without having to pay fines.Which it did. As well as negotiating fresh deals with Delta, and United, and eventually emerging, as of this week, in far better shape than when it entered protection.So, everyone's happy, right? Well, no.For a while now, this one has been one of those Qs that has drawn a lot of speculative buy volume. The restructuring, the fresh commercial deals, the fact that the company still made money when it entered bankruptcy, and that it was the threat of heavy fines as opposed to existing crippling debt (although existing debt was a factor, but not to the scale seen in some Qs) all came together to indicate shareholders who held going into bankruptcy would get some degree of reprieve on exit.Even as the company announced its emergence, Republic's share price ran up a few points. However, what really happened, is this:

Classification: Class 5 contains all Interests in RAH, which include any equity security of RAH and any warrants, options, convertible securities, liquidating preferred securities, or contractual rights to purchase or acquire any such equity interests at any time and all rights arising with respect thereto. Translation: shareholders, anyone with warrants, options etc. Treatment: Pursuant to the Plan, on the Effective Date, all Interests in RAH shall be deemed cancelled and extinguished and the holders of such Interests shall not receive or retain any property on account thereof.Translation: all your shares are now cancelled and, by proxy, completely worthless. Impairment and Voting: Class 5 is impaired by the Plan. Pursuant to section 1126(g) of the Bankruptcy Code, Class 5 is deemed to reject the Plan and the holders of Interests in Class 5are not entitled to vote.Translation: we know this wouldn’t and doesn’t make you happy, so we didn’t let you vote on the matter.

The above was taken directly fro the Plan of Reorganization – filed on November 16, and the POR that the company just emerged with. Read it in full here.So, what this means is, despite the company emerging from a seemingly very smooth bankruptcy process, and despite it not really being in too much trouble to start with (we'll give it its due, trouble was just around the corner), most creditors are coming out fully paid, but shareholders get nothing.Why the company is ticking up, is anyone's guess. The bottom line here is that, however unethical it might seem for the company to drop its base like this, Republic shareholders are now holding nothing of worth.That's the risk of playing with Qs.We will be updating our subscribers as soon as we know more. For the latest updates on RJETQ, sign up below!Disclosure: We have no position in RJETQ and have not been compensated for this article.