Sometimes the terms negotiated for a CR can include...

Sometimes the terms negotiated for a CR can include management/board not participating. I’m not saying this was the case here, but I’ve seen it before. In other words, the investors picking up the CR stock don’t want any of it going into the right hands of (say) management that are top 20 holders.

Ive also seen management sell down their existing holding a little as one of the CR conditions.

When I’ve seen this is the past, it’s to satisfy participants in the CR that there is enough liquidity in the trading of the stock going forward. When management hold large chunks of stock it reduces the free float, limits liquidity and market makers don’t like this.