Just like people, companies can file for bankruptcy

Just like people, companies can file for bankruptcy. Bankruptcy is a legal declaration that you can not pay your debts. However, the problem is that if a company has a large public company that has given thousands of ordinary shares to other shareholders, occurs significantly.

If you are one of these shareholders, one might ask how the failure of this enterprise is connected.

There is no reason to panic though.Even if you own a small piece of the company, you are personally responsible for the failure of the enterprise reporting. You risk a lot of money because the value of the stock can fall to zero, but the creditors do not ask at home and asked for millions! However, they are still conscious to constantly hold responsible, as the company is operating in bankruptcy. It has a bit to say and how it works.

Companies can choose to receive7 or Chapter 11 or Chapter Most choose to Chapter 11 with the desire to one day return to profitability file, although it currently does not pay to be able to his debts. The company's stock may continue to be marketed, while this is happening. Sometimes, a trustee and creditors will take care of the reorganization, and sometimes worry the new owners. It depends on the specific situation.

In the case of Chapter 11 bankruptcy, if the restoration plan is completed, as Shareholders receive one vote. Specifically, Sent and if you agree to agree, but. If you do not agree to vote against it. Your voice makes a difference, because if enough people vote against it, the company can not carry out the plan.

In some cases this is not how to choose companies to proceed. If the company is deeply in debt and sees no possibility of return on that debt, even after a reorganization, the company declared a Chapter 7Bankruptcy> with the intention to liquidate its assets. When a fluid society, the trustee sold all assets to pay creditors. First, secured claims are paid back, and then the unsecured debts are repaid. If there is more money allocated to the shareholders, but that's rarely the case.

The bottom line is that failure is bad for everybody. Follow what's happening in your company, try to be aware that this is in the pipeline. The stock market isa gamble that paid sometimes not.

Source: http://finance-bankruptcy-medical.chailit.com/just-like-people-companies-can-file-for-bankruptcy.html

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