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  • superbowl6wins superbowl6wins Mar 19, 2013 11:30 PM Flag


    Claims of people and entities that are owed money come first.
    Stockholders come last if at all. Preferred Stock owners, if any, come before those who
    own the common shares. The order of priority for claims is approximately as follows:
    Taxes owed
    Wages owed
    Trade Creditors (suppliers etc., if the company is to continue operating)
    Bank lenders, Commercial Paper and Bond holders (order depends on the relative
    strength of covenants in each document)
    Preferred stock if any
    Common Stock IF AT ALL
    In a very high percentage of cases (well upper 90s!) the common stock of the old
    stockholders is wiped out. It is valuable only as a souvenir or as wallpaper. If the
    company emerges from the bankruptcy process as a continuing going concern, it will
    issue new common stock. Who gets that? People and entities on the list starting below the
    “wages” line. In many bankruptcies, the reason for the corporate failure is the use of too
    much leverage (is that word familiar from the current financial news?). In order to keep
    operating, the company must stop paying so much interest on debt and dividends on its
    preferred stock (if any). So the court converts old debt and preferred stock to new
    common shares. Common holders get nothing in virtually all cases.
    The last major USA bankruptcy in which common holders were not 100% wiped out was
    that of Texaco in the late 1980s.

    that was over 25 years ago !

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Yep SuperB...and 90+% of BK's are the result of companies that have negative value.. If you think that is true of EK...than you have taken a very superficial view of this...which also explains why you will be on the sidelines watching ...with a stupid look on your face.

      Sentiment: Strong Buy

      • 1 Reply to arcticfax
      • "... and 90+% of BK's are the result of companies that have negative value ..."

        littlefred/fax, EK has negative revenue growth, EK has negative cash flow, EK has negative asset growth, EK supplies a print industry that's irreversibly in decline, EK has a dysfunctional executive team and BOD ... Only a la-la pumpster like littlefred/fax would think EK doesn't fit the profile of the 90+% BK companies who gave their common shareholders a good whipping for the farewell ... well, imo, imposters and apple polishers like littlefred/fax deserve it anyways ... so it's all good in your case.

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