When a corporation files for Bankruptcy who is responsible?
I know a company can file for different types of Bankruptcies, like Chapter 11 which allows a company to reorganize, or Chapter 7 which involves the process of Liquidation….but my question is, once a company has declared Bankruptcy, who in the company is actually responsible for going through with everything? The CEO and CFO? The stockholders? The private investors? The federal government?
Like, what if a company files Bankruptcy and they owe their investors money….what if they are unable to repay the investors, even after the liquidation process?
Posted January 26th, 2010 in Bankruptcy Q and A. Tagged: bankruptcy, ceo, chapter 11, chapter 7, federal government, liquidation, money, private investors, stockholders, types of bankruptcies.
All assets are converted to Cash and the Cash is distributed according to the legal priorities -
January 26th, 2010 at 1:14 pmi.e. secured creditors first etc.
If there is no Cash left over for the shareholders – they are out of luck. The whole thing is handled by a Court appointed Receiver.
most bigger companies usually have insurance for these kinds of things. If they do have any real property, it will be liquidated and any debtors will receive a portioned payback, usually nothing greater than 20 cents on the dollar. But then the debtor can write off the loss at the end of the year.
January 26th, 2010 at 1:14 pmThe most appropriate site for your question –
http://www.usalegalcare.com/Bankruptcy.htm
Trust me its good
January 26th, 2010 at 1:14 pm