I called CO the other night regarding this issue. I clearly explained the siutation to the agent and first asked if me and my family had seats in FC on this flight. She said, "well since you certainly know the situation well I am not going to lie to you we are definitely oversold"

She offered to fully refund all of the tickets - which of course I declined.
She then offered to fly us on another airline in FC. I had previously checked other flights and the only other non-stop is AA from JFK which is not an option to me.

She was initially trying to get us off of the flight (which would have solved a large part of the problem for them) - but she was extremely nice and helpful.

I asked her how many unassigned seats there were in FC and she told me that there were three. I told her "I really shouldn't do this but give me and my family the three unassigned seats and I'll accept the bump from FC to Y for my daughter on the reward ticket." After 20 minutes she came back and told me they gave us 1 A/B/E and put my daughter back in Y. They put a note in the records to the EWR staff to not take our seats away.

She did highly recommend to arrive early as there will be about 8-10 FC pax being bumped and it won't be pretty.

I don't have a warm and fuzzy feeling about this.
We'll see....