Timeline for What happens to the shareholders when a public company declares bankruptcy?
Current License: CC BY-SA 4.0
6 events
| when toggle format | what | by | license | comment | |
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| Jan 15, 2019 at 19:05 | comment | added | SafeFastExpressive | Again, whatever is advantageous for senior debt holders is immaterial to the actual question of what happens to public shareholders. | |
| Jan 15, 2019 at 3:20 | comment | added | S Spring | The bankruptcy court, in a substantial re-organization, has a legal obligation to settle with the senior debt holders and that is a major factor on the value of the company left to the stockholders. The senior debt holders are just additionally inclined to short the stock because the bonds are less liquid but have a value if held into a re-organization. | |
| Jan 15, 2019 at 3:01 | comment | added | hmakholm left over Monica | There's nothing about owning senior debt that gives the owner of that debt any opportunity to short the stock that everyone else doesn't have. In fact, if being a senior creditor somehow gives them knowledge of the company's trouble earlier than the public gets it, then it would almost universally be insider trading (a criminal offense) to short the stock based on that knowledge. | |
| Jan 15, 2019 at 0:36 | comment | added | SafeFastExpressive | This doesn't really address the question. Any potential trades for the debtors also carry their own risks for the debtors, and don't directly affect what happens to OPs shares. | |
| Jan 14, 2019 at 21:26 | history | edited | S Spring | CC BY-SA 4.0 |
added 9 characters in body
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| Jan 14, 2019 at 21:15 | history | answered | S Spring | CC BY-SA 4.0 |