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Right. But assets < liabilities means that “what is left” is nothing.
by NotYourLawyer 3y ago
Right. But assets < liabilities means that “what is left” is nothing.
- matwood 3y agoOn paper before the bankruptcy process happens. There is often a restructuring, assuming the business can become a going concern again.
- slv77 3y agoShareholders have no priority and the only hope for shareholders to recover anything would be through government intervention (e.g. American International Group). The value in Evergrande was entirely in its financial engineering capabilities and not in its construction expertise. The loss of confidence means that the financial side of the business has zero value now and nobody would be give them new money today even if excess liabilities magically disappeared and the construction side is severely impaired as there is little demand for new apartments.
- NotYourLawyer 3y agoRestructuring doesn’t create money out of thin air. If the bondholders aren’t paid off in full, there’s nothing left for equity.