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But these allocations are not set in stone. the debtor and creditors
are permitted to modify the treatment of claims, if the affected
parties consent to the terms of a proposed plan of reorganization.
So, if you think that the company has value worth fighting for (as
opposed to simply writing off losses), then you may want to enter
into negotiations with other constituencies in the case to try to
improve your outcome.
won't be as much as it was when you first entered your position and it won't be in
the same form investors are considered especially low on the ladder. Usually, the
stock of a company proceedings is usually worthless, and investors lose the
money they invested. If you hold a bond, you might receive a fraction of its face
value. What you receive depends on the amount of assets available for
distribution and where your investment ranks on the priority list on the first
page.
Secured creditors have the best chances of seeing the value of their initial
investments come back to them. Unsecured Creditors and shareholders must
wait until secured creditors have been adequately compensated before they
receive any compensation for the loss of their higher-yielding investments.
Because equity owners are last in line, they usually receive little, if anything.