Bankrupt, have stocks all gone back to zero? I don't really ...
$3B家居(BBBY.US$ Bankrupt, have stocks all gone back to zero? I don't really understand
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
broad-minded Dingo_2 : Not for the time being, you can continue trading for a while
王叁岁. : Looking at it now, if a company applies for bankruptcy protection, it may choose one of the Chapter 7 and Chapter 11 of the Bankruptcy Law for execution. Let's take a quick look at the differences between these two laws.
The US Bankruptcy Code governs how companies stop operating or how to get out of the debt abyss. When a company is close to running out of trouble, it can invoke Chapter 11 of the Bankruptcy Law (that is, chapter 11, which we often see in company disclosure documents) to “restructure” the business and try to make a profit again. A bankrupt company, or “debtor,” can still operate as usual. The company's management continues to be responsible for the company's day-to-day business, and its stocks and bonds also continue to be traded in the market, but all major business decisions of the company must be approved by a bankruptcy court, and the company must also submit reports to the Securities and Exchange Commission.
At the same time, a company can also file for bankruptcy based on Chapter 7 of the Bankruptcy Law (that is, chapter 7, which we often see in company disclosure documents), and all of the company's business must be completely stopped immediately. The bankruptcy estate custodian “clears” (auctions) the company's assets, and the funds obtained are used to repay the company's debts, including debts to creditors and investors. Shareholders' stock usually becomes a waste sheet of paper, because if the bankruptcy court determines that the debtor is insolvent (the debt is greater than the asset), the shareholder's investment cannot be returned. Furthermore, after the company's assets are liquidated and priority is paid to secured creditors and unsecured creditors, there is often little left.
Ixy The Cat : All you need to know is effectively shareholders GET NOTHING
razo2 : when company files for chapter 11 usually they will still want the business to continue. but the new stock ticker will be changed and the old ticker will be removed. hence wipe out all old stock to almost 0. shorts will be forgiven, longs will be either by the good will of the company to be paid an amount or nothing. the company usually will pay their debtors first, stock holders will be the last to get anything.