Replies to post #60886 on iTalk Inc. (fka TALK)

[Scott12]

Wrong. Most of the time when a company files for bk protection the stock becomes worthless.

"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."

https://www.sec.gov/investor/pubs/bankrupt.htm