What happens to my stock shares when a company files for Chapter 11 bankruptcy?

Nothing happens to them. You still have them and you are still an owner or stockholder of the company. When a company files for Chapter 11 bankruptcy, it means that the company and its creditors are working together to restructure the company's debt in order to continue operations. The most common way this happens is through a restructuring plan that's approved by the bankruptcy court. At that point, all of the company's creditors will be paid off, and whatever is left over (which may be nothing) will be distributed to shareholders. If you hold your shares in a brokerage account, you're likely to get an email from your broker telling you whether your shares have been affected by the bankruptcy filing.

If your shares have been affected by the bankruptcy filing, you'll need to decide whether to sell them or hold onto them until after the restructuring plan is approved.


 

A company filing for Chapter 11 bankruptcy actually doesn't mean the end of your stock shares. A Chapter 11 bankruptcy is a reorganization of the company. If a company is able to restructure its debt through a process called a "repayment plan", it can continue operating and even increase its value. A Chapter 11 bankruptcy does not mean that company stock will be worthless, or that you need to sell off your shares before it's too late. Instead, when a company files for Chapter 11 bankruptcy, it's saying: "We have way more debt than we can handle on our own, but we still want to keep doing business."

If you have more bankruptcy or business law questions, call this law firm for a free consultation: 

Ascent Law LLC

8833 S Redwood Rd Ste C

West Jordan UT 84088

(801) 676-5506

https://g.page/AscentLaw

https://www.ascentlawfirm.com/chapter-11-bankruptcy-lawyer/

 

Comments

Post a Comment

Popular posts from this blog

What will I lose if I file for bankruptcy?

Image
This depends on several things. First, what state do you live in - the state exemptions will allow you to keep certain property. Each state’s laws are different. Second, the chapter of bankruptcy that you file. Typically, in chapter 13, you keep most (if not all of your property) because it is more of a reorganization than it is a liquidation. If you are filing a chapter 7 bankruptcy, you should really speak with a lawyer because you can lose things if you don’t do the paperwork right. Just because the law allows you to keep something under an exemption law, if you don’t put the law in your paperwork, you don’t get it. You might think that the only thing you lose when you file for bankruptcy is a bunch of money (and some of your things, if you can't keep them after the bankruptcy). But what you lose is really a lot more than that. It's very important to think about what you'll be giving up before choosing whether or not to hire a bankruptcy attorney in your area. If ...
Read more

Why should I have to pay my wife alimony when she is able to work?

Image
Alimony is a payment that one spouse will make to the other after they separate or divorce. You are not required to pay alimony if you don't want to, and if you're the one who asks for alimony, you'll have a hard time getting it. But if your spouse is able to earn money, and you aren't, you could be forced to pay the alimony.   My wife and I have been married for the past 7 years. We have 3 kids. In any other case, she would be entitled to 60% of the marital assets.   However, she is a stay-at-home mother who does not work. I am employed full-time as a manager at a local bank.   I do not make enough money to support our family on my own, so I want her to contribute as well. She is against this idea, and I don't understand why.   Is there anything that can be done?   When you get married, you make a commitment to support each other. You mutually agree on your goals and economic situation, then build a life together and solidify that agreement by creating a legal ...
Read more

How do you change the executor of a will?

Image
Changing the executor of a will is an important decision that requires the specific attention of an estate planning attorney. If you're looking to change your will and add a new executor, you should consult with an attorney for help. The first step is to decide who you want to appoint as your new executor. Your choice must be reviewed by your attorney to ensure that person is legally able to fulfill the duties of the position , including knowing what documents are needed from them and how they need to be filed. The next step is telling your current executor. This person can be informed in person, over the phone, or via a letter that includes their current contact information so they can get in touch with the proper offices if anything needs updating. You'll also need to update any health care proxies or powers of attorney. Your next step after this is to call your estate planning attorney. Parklin Law LLC 5772 West 8030 South, Unit N206 West Jordan, UT 84081 (801) 61...
Read more