What they did wrong was accepting an all-shares transaction in the acquiring company. Those come with risks, and sometimes the risk is that the company goes bankrupt a year later and you'll be left with nothing.

My understanding is that they were badly advised by Goldman Sachs. Still, "doing the right thing" sometimes includes ignoring bad advice.

The way I see it is that they did not stand a chance and for me the moral of the story is that if you are not screwed by investors you can very well get screwed by someone else.