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You'll need a source for your aggressive claims -- these suggest that chapter 11 recidivism isn't that rare ("less than a handful" is patently false) [0][1]. An

You'll need a source for your aggressive claims -- these suggest that chapter 11 recidivism isn't that rare ("less than a handful" is patently false) [0][1]. And I wouldn't go so far as to abolish it, but to give debtors a stronger vote in the proceedings. Right now, the balance of power strongly favors shareholders, socializing the losses amongst creditors and prolonging the demise of companies that have no future (e.g. JC Penney). [0] https://blogs.harvard.edu/bankruptcyroundtable/tag/chapter-22/ https://blogs.harvard.edu/bankruptcyroundtable/tag/chapter-2... [1] https://www.reuters.com/article/us-bankruptcy-repeats/companies-turn-to-bankruptcy-again-and-again-idUSTRE8251N120120307 https://www.reuters.com/article/us-bankruptcy-repeats/compan...

texasbigdata 6y ago
Less than 1%. # of 22s (1) / total cases (2). To your following point, that’s not how bankruptcy works. Creditors can credit bid, creditors can hand together and push a company into involuntary bankruptcy (not common), creditors have a tremendous amount of remedies whereas shareholders do not. It would be a super long discussion really chopping this up, as to why, however look up recovery rates for different assets and/or market prices for various liquid (aka tradeable) assets after a company files for bankruptcy. You will find the higher up the capital structure the security (aka secured debt, followed by unsecured debt, followed by equity) the higher the price/recovery/expected value. The link you sent was interesting though. Thanks for sharing. 1. https://www.uscourts.gov/statistics-reports/us-bankruptcy-courts-judicial-business-2017 https://www.uscourts.gov/statistics-reports/us-bankruptcy-co... 2. https://www.google.com/amp/s/www.sissonlawoffice.com/blog/filing-again-understanding-chapter-22-bankruptcy%3Fhs_amp%3Dtrue https://www.google.com/amp/s/www.sissonlawoffice.com/blog/fi... Quote: “ Radio Shack made the news in 2017 when it filed for Chapter 22. That second Chapter 11 came only two years after it underwent a restructuring in 2015. Instead of opting to continue the business, its owner, General Wireless Operations, chose to liquidate all the remaining retail outlets.” ....seems pretty rare to me.

texasbigdata 6y ago

Less than 1%. # of 22s (1) / total cases (2). To your following point, that’s not how bankruptcy works. Creditors can credit bid, creditors can hand together and push a company into involuntary bankruptcy (not common), creditors have a tremendous amount of remedies whereas shareholders do not. It would be a super long discussion really chopping this up, as to why, however look up recovery rates for different assets and/or market prices for various liquid (aka tradeable) assets after a company files for bankruptcy. You will find the higher up the capital structure the security (aka secured debt, followed by unsecured debt, followed by equity) the higher the price/recovery/expected value. The link you sent was interesting though. Thanks for sharing. 1. https://www.uscourts.gov/statistics-reports/us-bankruptcy-courts-judicial-business-2017 https://www.uscourts.gov/statistics-reports/us-bankruptcy-co... 2. https://www.google.com/amp/s/www.sissonlawoffice.com/blog/filing-again-understanding-chapter-22-bankruptcy%3Fhs_amp%3Dtrue https://www.google.com/amp/s/www.sissonlawoffice.com/blog/fi... Quote: “ Radio Shack made the news in 2017 when it filed for Chapter 22. That second Chapter 11 came only two years after it underwent a restructuring in 2015. Instead of opting to continue the business, its owner, General Wireless Operations, chose to liquidate all the remaining retail outlets.” ....seems pretty rare to me.