What will happens to stocks of a company that claims chapter 11?
August 20, 2009 by Bankruptcy and Debt Settlement Tips
Filed under More Bankruptcy Answers
Can you answer drevrandfan’s question about Bankruptcy?:
I know that their stock will be pretty much worthless, but of they claim chapter 11 will their current stock holders be able to keep their stock? or does it all fritter away? cause i think that GM should claim chapter 11 so they can restructure, and then they may be able to be profitable in the future, a long way into the future but still.
How To File Chapter 7 Bankruptcy
I know that their stock will be pretty much worthless, but of they claim chapter 11 will their current stock holders be able to keep their stock? or does it all fritter away? cause i think that GM should claim chapter 11 so they can restructure, and then they may be able to be profitable in the future, a long way into the future but still.
How To File Chapter 7 Bankruptcy
Bankruptcy Feedback: You are very bright. I agree, and wrote extensively on this last year.
In the event of a BK, the equity typically will end up at zero when the bankruptcy is complete and this is finalized by the bankrupts court.
GM is currently worth zero in or out of bankruptcy. Look:
Bankruptcy Feedback: When a company files chapter 11 in most cases the stock is eventually canceled and new stock is issued in the reorganization. Current stock holders must buy the new stock again. They lose everything on the current stock.
Bankruptcy Feedback: might rebound
Bankruptcy Feedback: If you think about it, when a company emerges from chapter 11, it is actually a new company. None of the old stock and bonds are tied to this new company, and they are therefore worthless. Some of the old bondholders may be able to get some value from the new company based on what agreements are made, but stockholders are out of luck. That company in which you invested no longer exists, and a new one has taken its place, with its own (different) stock.