Actionable news
All posts from Actionable news
Actionable news in LINE: Linn Energy, LLC,

Get Rid Of Your Linn Energy Shares Now


This is serious: Get rid of your Linn Energy shares.

If you want to do it the best possible way, you have a single day to act.

If you fail to act during that time frame, you might have to sell those shares at any price as they'll be worth less than zero to you.

Source: Stock photo.

This is an urgent warning for unaware Linn Energy LLC (NASDAQ:LINE) unitholders out there: You need to get out of your LINE units. You need to either sell them or accept LINE's offer to exchange them for Linn Co. LLC (NASDAQ:LNCO) shares. This offer has been extended, but expires on April 25 at midnight.

I am putting out this note because LINE unitholders could be exposed to losses that would go over and beyond just losing all of their investment in LINE units. The likelihood of LINE (and LNCO) being worth zero is already high, but this problem goes well beyond that.

The Problem

To start, you have to understand that LINE is not like the other stocks you usually trade. It's not structured as a corporation. Instead, it's structured like a partnership. In this structure, the company does not pay income taxes -- you'll be familiar with it. LINE does not pay taxes, only its unitholders do. Previously, it made distributions and you paid taxes on those distributions.

Ordinarily, those distributions would come from regular profits and you'd pay taxes just on those distributions. But right now, something a lot weirder is about to happen. LINE is about to file Chapter 11. And when it does (actually, when it comes out of it), unitholders will be in a world of hurt.

With a regular corporation, upon filing for Chapter 11...