Yes, the key word is "Recapitalization." The company was in trouble so they most likely reissued new stock when they got more money to continue operations. When companies get into trouble it's unlikely any of the original stockholders will ever get any money. Depending on the situation if notice is required, not always required, it can be as simple as a notice in the newspaper.
It's unlikely they did anything illegal simply because it's relatively straitforth to follow the law and cancel all previous stock and reissue new.