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Moderator: TrevorInAustin Assistants: Greta Grabo, JJdivini, the cork
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Last Post: 12/1/2018 2:17:43 PM - Followers: 236 - Board type: Free - Posts Today: 0




Our stocks may be "up da creek" with a Q, but they are working their way back...and some get downright HOT & are taking us traders along for the ride :)










What Every Investor Should Know


Corporate Bankruptcy

What happens when a public company files for protection under the federal bankruptcy laws? Who protects the interests of investors? Do the old securities have any value when, and if, the company is reorganized? We hope this information answers these and other frequently asked questions about the lengthy and sometimes uncertain bankruptcy process.

What Happens to the Company?

How Are Assets Divided in Bankruptcy?


  1. 1. Secured Creditors - often a bank, is paid first.


    2. Unsecured Creditors - such as banks, suppliers, and bondholders, have the next claim.


    3. Stockholders - owners of the company, have the last claim on assets and may not receive anything if the Secured and Unsecured Creditors' claims are not fully repaid.

Federal bankruptcy laws govern how companies go out of business or recover from crippling debt. A bankrupt company, the "debtor," might use Chapter 11 of the Bankruptcy Code to "reorganize" its business and try to become profitable again. Management continues to run the day-to-day business operations but all significant business decisions must be approved by a bankruptcy court.

Under Chapter 7, the company stops all operations and goes completely out of business. A trustee is appointed to "liquidate" (sell) the company's assets and the money is used to pay off the debt, which may include debts to creditors and investors.

The investors who take the least risk are paid first. For example, secured creditors take less risk because the credit that they extend is usually backed by collateral, such as a mortgage or other assets of the company. They know they will get paid first if the company declares bankruptcy.

Bondholders have a greater potential for recovering their losses than stockholders, because bonds represent the debt of the company and the company has agreed to pay bondholders interest and to return their principal. Stockholders own the company, and take greater risk. They could make more money if the company does well, but they could lose money if the company does poorly. The owners are last in line to be repaid if the company fails. Bankruptcy laws determine the order of payment.

What Will Happen to My Stock or Bond?

A company's securities may continue to trade even after the company has filed for bankruptcy under Chapter 11. In most instances, companies that file under Chapter 11 of the Bankruptcy Code are generally unable to meet the listing standards to continue to trade on Nasdaq or the New York Stock Exchange. However, even when a company is delisted from one of these major stock exchanges, their shares may continue to trade on either the OTCBB or the Pink Sheets. There is no federal law that prohibits trading of securities of companies in bankruptcy.

Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.

If the company does come out of bankruptcy, there may be two different types of common stock, with different ticker symbols, trading for the same company. One is the old common stock (the stock that was on the market when the company went into bankruptcy), and the second is the new common stock that the company issued as part of its reorganization plan. If the old common stock is traded on the OTCBB or on the Pink Sheets, it will have a five-letter ticker symbol that ends in "Q," indicating that the stock was involved with bankruptcy proceedings. The ticker symbol for the new common stock will not end in "Q". Sometimes the new stock may not have been issued by the company, although it has been authorized. In that situation, the stock is said to be trading "when issued," which is shorthand for "when, as, and if issued." The ticker symbol of stock that is trading "when issued" will end with a "V". Once the company actually issues the newly authorized stock, the "V" will no longer appear at the end of the ticker symbol. Be sure you know which shares you are purchasing, because the old shares that were issued before the company filed for bankruptcy may be worthless if the company has emerged from bankruptcy and has issued new common stock.

During bankruptcy, bondholders will stop receiving interest and principal payments, and stockholders will stop receiving dividends. If you are a bondholder, you may receive new stock in exchange for your bonds, new bonds, or a combination of stock and bonds. If you are a stockholder, the trustee may ask you to send back your old stock in exchange for new shares in the reorganized company. The new shares may be fewer in number and may be worth less than your old shares. The reorganization plan will spell out your rights as an investor, and what you can expect to receive, if anything, from the company.

The bankruptcy court may determine that stockholders don't get anything because the debtor is insolvent. (A debtor's solvency is determined by the difference between the value of its assets and its liabilities.) If the company's liabilities are greater than its assets, your stock may be worthless. Contact your local Internal Revenue Service (IRS) office or call 1-800-829-1040 for information about how to report worthless securities as a loss on your income tax return. If you don't know whether your stock has value, and you can't find a stock or bond price in the newspaper, ask your broker or the company for information.

Full Story:     http://www.sec.gov/investor/pubs/bankrupt.htm

DISCLAIMER :  By posting or reading this board or subscribing to the email alerts from this board you are accepting the sole responsibility for your own investment decisions. Beware that posters on not only this message board but other message boards not limited to iHUB may be increasing or decreasing their share positions in a security regardless of what they are posting and/or may be compensated in some way from a company or 3rd party investor in the company mentioned in the post. Assume that any security mentioned by a poster (anyone who writes a post) on this board is owned by that poster.  Always do your own DD, make your OWN investment decisions, never borrow money to buy penny stocks, and always remember that all penny stocks are highly risky - they are pennies for a reason. By Visiting this board you acknowledge that you understand the risks of investing in the stock market,that you have done your own due diligence,that you accept full responsibility for your own choices as it pertains to your investments or investment decisions you have made for others. NEVER INVEST IN A PENNY STOCK UNLESS YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. The information in this message board is provided solely for general opinionated discussion and informational purposes and therefore should not be considered complete, precise, accurate, or current. No statement within this message board past, present, or future should be construed as a recommendation to buy or sell a security or to provide investment advice. Past performance is not indicative of future results. Trading securities and options involves extreme risk and professional guidance. Moderators do not give specific trading advice nor claim that a thorough analysis of each security mentioned has been conducted. We are not Financial Analysts, Investment Brokers, Financial Advisors, Guru's or any sort of professional that would be deemed as an individual someone would rely upon for investment advice. You should discuss the asset allocation and risk tolerance level which is appropriate for your personal financial situation with a professional financial planner / adviser. You should also not make any trades or decisions based upon anything said or written on this board or any board by a poster of this board with regard to investments without consulting a professional financial planner/advisor. Always assume at all times that the moderators of this board may have a position in any of the securities they mention and could be buying or selling. You are responsible for your own decisions regarding your investments. The Moderators of this board or any board he/she/they are considered to be a part of are under the umbrella of this disclaimer regardless of what board they have been affiliated with in the past, present or future or what investment at that time they posted comments on.    
Harvey Organ

#9212  Sticky Note Board name change***. The board name will be TrevorInAustin 04/10/10 04:09:40 PM
#7374  Sticky Note When a company is on the verge of TrevorInAustin 07/15/09 06:33:13 PM
#3478  Sticky Note What Every Investor Should Know AllyAustin 05/15/09 03:33:58 AM
#9927   hmmm, any other news ????? $ARIOQ mick 12/01/18 02:17:43 PM
#9926   crickets bushman23 01/15/17 01:19:16 AM
#9925   ARIOQ Commons stay ;-)BOOMTIME IMO. ARIOQ $avvyPenny$tockInvestorâ„¢ 06/16/16 04:40:24 PM
#9924   ARIOQ shares to be cancelled next week Greta Grabo 06/16/16 09:55:09 AM
#9923   Attention: Merry Christmas to all! the cork 12/24/15 10:58:18 PM
#9922   Thanksgiving Holiday Best Wishes to all board friends! the cork 11/26/15 01:49:01 PM
#9920   Hello all, brake 07/18/15 01:32:20 PM
#9919   BPZRQ looking to sell assets...could get interesting Iron Maiden 06/10/15 10:42:10 AM
#9918   Not new, other than the refreshingly inclusive nature the cork 05/28/15 03:33:12 PM
#9917   PALDF is offering warrants/options to policy holders C C 05/27/15 11:01:41 PM
#9916   It's a credit to PALDF management they didn't the cork 05/27/15 02:08:52 PM
#9915   cork here is a new twist to Q companies C C 05/26/15 11:28:37 PM
#9914   Thanks Cork. Always appreciate your wisdom and Lone Wolf 05/11/15 08:09:06 AM
#9913   Hey Lone Wolf, I've gotten away from the the cork 05/09/15 10:03:19 PM
#9912   Hey most brilliant Q-trader...This past week I came Lone Wolf 05/09/15 05:39:08 PM
#9911   Hope you guys bought $BPZRQ 0.047 today. Just straitneom 05/05/15 10:45:05 AM
#9910   BPZRQ news! Annual Meeting June 19th..merger announcement? http://ir.bpzenergy hinchback 04/29/15 06:08:33 PM
#9909   BPZ's revenue producing asset is a license contract straitneom 04/29/15 08:30:32 AM
#9908   I'm still trying to figure out what advantage the cork 04/29/15 03:50:00 AM
#9907   a lot of Court documents but this one hinchback 04/28/15 11:36:15 PM
#9906   how Court authorized? because they found finance to hinchback 04/28/15 11:15:59 PM
#9905   Hmmmm....Any thoughts Cork..? Iron Maiden 04/28/15 10:11:44 PM
#9904   BPZRQ no BK here..Court authorized BPZ ENERGY to hinchback 04/28/15 05:23:19 PM
#9903   interesting Blackrock and Fidelity sold 15 million shares..bigger hinchback 04/15/15 07:05:47 PM
#9902   $BPZRQ added at .036 Pacific Rubiales is a straitneom 04/15/15 02:34:34 PM
#9901   BPZRQ - Rumors in another forum saying there Iron Maiden 04/15/15 02:16:56 PM
#9900   Interesting action today on BPZRQ...8K yesterday... Iron Maiden 04/14/15 02:15:33 PM
#9899   Thanks for the input...I picked up some at Iron Maiden 04/06/15 02:52:20 PM
#9898   Not familiar with BPZRQ, but the debt to the cork 04/06/15 02:10:03 PM
#9897   You too...thoughts on BPZRQ? Iron Maiden 04/06/15 11:31:03 AM
#9896   Best Easter Wishes to the Q Stock Traders! the cork 04/05/15 03:16:31 PM
#9894   Gold Miner Allied Nevada Files for Chapter 11 Bankruptcy the cork 03/13/15 03:22:21 PM
#9893   CANMQ 006 10M O/S >> breakout position >> l2 hunter 07/05/14 05:57:16 PM
#9892   OCZTQ: What's the deal? liggity 05/04/14 09:29:30 AM
#9891   CWTR to file Bk in week, $0.18 area the cork 03/31/14 02:09:39 PM
#9890   ; ) JJdivini 03/07/14 01:20:54 PM
#9889   Thanks. I was thinking so as well. Druides 03/07/14 01:19:52 PM
#9888   interesting, probably most certainly does... Best of JJdivini 03/07/14 01:18:50 PM
#9887   CHADQ What do you think? FINRA reinstated Druides 03/07/14 01:12:27 PM
#9886   Trump, gotta get this board going again... JJdivini 01/20/14 11:27:21 PM
#9885   UFFCQ - UFood Restaurant Group, Inc (.0024) up the cork 01/15/14 01:02:07 PM
#9884   UFFCQ 002 48M OS >>>> volume & chart l2 hunter 11/25/13 01:06:21 PM
#9883   UWBKQ worth a few hundred, fyi. Chpt. ArtieB 10/14/13 12:11:50 PM
#9882   CPRKQ: Finra Filing: Plan of Bankruptcy effective. the cork 06/25/13 01:17:45 PM
#9881   CPRKQ - Copper King Mining Corp. Emerging from the cork 06/25/13 03:37:14 AM
#9880   IFIXQ is moving! Norton1973 03/22/13 11:31:47 AM
#9879   Christmas Greetings Q Stock Traders! the cork 12/25/12 02:27:30 AM
#9878   MPPCQ coming back to life finally... Iron Maiden 09/04/12 11:08:15 AM
#9877   Yup, adding on dips & holding long term TheProfit 09/03/12 06:25:36 PM
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