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bankruptcy

by Ed
(Frenchville, Maine)

Question: when a company files for chapter 11 their stock symbol changes. If you buy stock in this company while in chapter 11, what happens to your stocks when they come out of chapter 11?

Answer: If you buy a stock of a company in chapter 11 bankruptcy you may still hold stock when the company emerges out of bankruptcy.

However it is extremely risky because there are so many things that may happen. For example the bankruptcy court may decide that shareholders do not recieve anything in which case the stock may become worthless.

The stock holders are last on the list after bond holders and creditors so the odds of coming out ahead by buying companies under chapter 11 can be pretty low.

To find out more click here to find out what the SEC says about stock holders and chapter 11 bankruptcy.

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bankruptcy

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Dec 02, 2009
 Company Bankruptcy
by: Codetrader

It seems to me that the ultimate danger lies in trading in companies that are near bankruptcy but have not yet filed. I don?t think there is any good way to determine that for the average guy trading his Scottrade account with limited experience. Insider trading may tell you something. But in the end you are at risk no matter what you do and in today?s environment who knows who will be next?


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