If no employees get anything, why wouldn't they organize and threaten to quit together (leaving Walmart buying the name, a founder or two and some technology with nobody to run it) to try to stop the deal? Isn't the whole idea of accepting 1/2 salary at a start-up because of your glorious equity? Whenever I hear about these "deals" where employees end up with nothing or close to nothing, I wonder what they are thinking. Why accept that?
EDIT: I suppose if the alternative is "run out of money next month and everyone's fired anyway", then worthless equity and a possible job maintaining that code at Walmart doesn't sound so bad.
I've met plenty of startup employees who've spent years educating themselves about programming and <10 minutes reading about equity, stock options, etc.
When Myspace got bought by News Corp, some employees got almost nothing(people who came from intermix) and some got nothing(people who join myspace directly). Lots of employees left afterwards. There's a book about the whole deal called "Stealing Myspace".
EDIT: I suppose if the alternative is "run out of money next month and everyone's fired anyway", then worthless equity and a possible job maintaining that code at Walmart doesn't sound so bad.