5 ms·
>but the upside is there if they pull it off. Pull what off? The company is bankrupt, the equity will be wiped out, they literally say that in the filing: "A
by itsoktocry 6y ago
>but the upside is there if they pull it off.
Pull what off? The company is bankrupt, the equity will be wiped out, they literally say that in the filing:
"Although we cannot predict how our common stock will be treated under a plan, we expect that common stock holders would not receive a recovery through any plan unless the holders of more senior claims and interests, such as secured and unsecured indebtedness (which is currently trading at a significant discount), are paid in full, which would require a significant and rapid and currently unanticipated improvement in business conditions"
No one is "putting their nose to the grindstone" to save the company. The money is going to the creditors.
- pbreit 6y agoEquity going to 0 is not a foregone conclusion in bankruptcies and there will be plenty of room for lawsuits if equity holders are wiped out.
- anthony_r 6y agoEquity "going to 0" is a consequence of a court proceeding called "bankruptcy". It is the courts of law that approve the deletion of equity. So not sure whom are you going to sue. It will not go to $0. It will simply stop existing. You are free to trade it until then.
- harryh 6y agoLots of companies enter bankruptcy, are restructured, and emerge from the process without equity being destroyed. There is certainly some chance that happens here.
- anthony_r 6y agoOh really, I thought it's super rare (like this filling strongly suggests). What are some examples?
- pbreit 6y agoIt's common for equity to maintain some value coming out of bankruptcy.