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Debt usually comes with strict repayment schedule. If you don't have enough cash flow to meet the repayment schedule you go into default. The debt holders force
by continuations 9y ago
Debt usually comes with strict repayment schedule. If you don't have enough cash flow to meet the repayment schedule you go into default. The debt holders force you into bankruptcy. You lose the entire company.
- erikb 9y agoWell, does a creditor have to push you into bankruptcy? They seldomly do, because then they can't squeeze more money or control out of you. And at the same time an investor could also push you into bankruptcy by suggesting, supporting or blocking certain decisions. It's like knight and bishop in chess. True, they work differently, but they are all just pieces on the same board, used in the same game to achieve the same goal.