Delcath Systems Inc (DCTH)

[Triceps22]

I'm with you that I don't think a BK is the first option. I was just positing the idea because a lot of people have misconceptions that with a BK, the company goes out of business. That could not be further from the truth.

If there were a BK, the company itself would continue business as usual. It might secure a DIP loan that supersedes the current debt, to allow for operations to continue running smoothly. The only thing that may possibly change is that old equity is wiped out and the creditors take over the newly issued equity.

But, I also think that is unlikely. Most bankruptcies stem from a situation where the liabilities exceed the value of the assets -- in this instance, it's more of a cash flow issue, the company has run out of money and cannot continue operations. The assets themselves are still incredibly valuable, and would be sold off to the highest bidder.

What is not supposed to happen -- and I say supposed to because there are always exceptions like Kmart, and the greedy creditors will undoubtedly try the same here -- is that the assets are intentionally undervalued so the entire thing goes to the creditors, and then miraculously, after BK, the value goes back up again.

In a BK, I would be willing to bet that Chemosat is sold, the creditors are made whole, and anything left over gets divided 500M ways and goes to the shareholders.