he is talking specifically about chapter 7, bankruptcy liquidation. Where, the owners just decide that they do not want to run the company anymore, for whatever reason, that is when they file for Chap 7, bankruptcy liquidation.See this video once again, you’ll get your answer.
Even when your Assets are greater than your Liabilities, you can still go bankrupt if you have 0 cash and are unable to pay the interest payments you owe on the debt. This is why there is the popular phrase “Cash is King”.
No, the stock/equity can only go to zero. It cannot be negative. If I own a share of GM, the worse thing that can happen is that it becomes worthless. I wouldn’t ever “owe” money to GM’s unsecured creditors.
There are stocks that you in fact have to pay off the debt in the company. Google “Brisconnections” (a company in Australia). The people who bought the stock recently owe $2 per share. The stock is at $0.01 and no buyers. So heaps of un-educated investors have been trapped into $mils of debt. The investors are getting taken to court cause they cant pay up.
that could just be australian law, or an australian loop hole (most likely) that the company crawled through and can legally demand the money from its shareholders
if you file for bankruptcy it’s not the end..I am in process of recovering or my husband is..please visit my blog
If the company had 7 million in assets and 6 million in liabilities then why would it file for bankruptcy?
he is talking specifically about chapter 7, bankruptcy liquidation. Where, the owners just decide that they do not want to run the company anymore, for whatever reason, that is when they file for Chap 7, bankruptcy liquidation.See this video once again, you’ll get your answer.
Thank you, I might have missed that.
Even when your Assets are greater than your Liabilities, you can still go bankrupt if you have 0 cash and are unable to pay the interest payments you owe on the debt. This is why there is the popular phrase “Cash is King”.
No, the stock/equity can only go to zero. It cannot be negative. If I own a share of GM, the worse thing that can happen is that it becomes worthless. I wouldn’t ever “owe” money to GM’s unsecured creditors.
There are stocks that you in fact have to pay off the debt in the company. Google “Brisconnections” (a company in Australia). The people who bought the stock recently owe $2 per share. The stock is at $0.01 and no buyers. So heaps of un-educated investors have been trapped into $mils of debt. The investors are getting taken to court cause they cant pay up.
Have they actually been forced to pay?
Its still in the woodworks so not yet. There has been no talk of a government bailout for these Average Joe’s who owe tens of millions.
that could just be australian law, or an australian loop hole (most likely) that the company crawled through and can legally demand the money from its shareholders