Great Basin Gold Ltd. (fka GBGLF)

[finbar99]

At the end of the day, it's usually real simple in bk - there is the claims hurdle (including the amdin fees of the bk process itself) and there is the value of what's inside the company. If the value is determined to be higher than the claims hurdle, equity is in the game, if it isn't they are not. The nice thing about a liquidation is that what's inside the company is mostly converted to cash, and cash is pretty easy to compare to the hurdle. The problem with a reorg is that an appraiser has to put a value on business operations. Appraisal is more art than science and the various constituencies in the case have differing motives when it comes to a low or high value being determined. If those with a vested interest in a lowball number have more clout in the case, those with a vested interested in a high number are going to screwed. In most cases, the assets really aren't worth more than the claims and equity gets zero. Where they are worth more, sometimes equity gets something and sometimes they don't - you really really have to identify the various constituencies and their motives to play fair.