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Interesting--thanks for clarifying. And are board seats typically handed over to the creditors during bankruptcy? Ie. do the creditors gain control of the boa
by shostack 11y ago
Interesting--thanks for clarifying. And are board seats typically handed over to the creditors during bankruptcy? Ie. do the creditors gain control of the board directly or via the ability to override their decisions?
I can only imagine the GM filings...will have to take a look at that sometime.
- ChuckMcM 11y agoRead the docket (posted up thread), but generally shareholders are debtors-in-possesion meaning they are "owed" a fraction of the company if they sold their shares. Everyone who has a share of American Apparel is listed on that docket as a creditor. As for board seats, I can't say. I've watched a couple of large companies restructure fairly closely but don't recall board seats being offered as part of that. Certainly at the point of being in Chapter 11 bankruptcy you're no longer the company you once were, one option is always to liquidate and move to Chapter 7 to disperse the assets. We had a customer company do that (one of the baby telephone companies) in the dot com bust when I was at Tut/FreeGate. As I recall from that transaction we got a check for around $3,000 for what had been something like $1.2M worth of networking gear they had deployed and not yet paid for.
- shostack 11y agoFascinating. Thanks for sharing your experience on that. Am I right in assuming that creditors are able to write off any such losses (such as your networking gear example)?
- ChuckMcM 11y agoAbsolutely, (writing off the lost sales).
- shostack 11y agoFascinating. Thanks for sharing your experience on that. Am I right in assuming that creditors are able to write off any such losses (such as your networking gear example)?