Telltale signs of an impending bankruptcy. Part 1.
All of these signs point to a Zalemark bankruptcy.
From a USA Today article by financial writer Matt Krantz.
"It's amazing how many individual investors seem to be caught off guard when a company files for bankruptcy protection. With few exceptions, investors usually have both unofficial and official notifications when something bad is going to happen to a company.
Let's first be clear. When you invest in a company, you are a partial owner of that firm. If a company is looking to file for bankruptcy protection, owners are not only informed of this decision, they are part of the decision.
Typically, when it looks like a company isn't going to able to afford the interest payments on its debt, and look to seek bankruptcy protection, owners are informed. When the restructuring deal is negotiated with creditors, stockholders have a table at the talks.
HOWEVER, keep in mind that when a company is defaulting on its debts, the shareholders don't have much say. That's because in the buffet line for assets, common shareholders bring up the rear. Shareholders only have claims to assets after all other creditors are paid, and that includes bondholders, suppliers and employees. Because of this, shareholders usually get all but wiped out as part of these restructurings.
That's why if you're going to invest in individual stocks, it's important to watch for signs that almost always serve as a harbinger of trouble. Here's what to look for so you don't end up being wiped out as part of a bankruptcy restructuring:"
Part 2 will be posted next.
