Directors will often put in a bid on behave of shareholders. They can’t finance it for more then share holders deficit minus tax’s that are owed “ treasury stock” . Should the highest bid be of the same domination the company will go too the shareholders and chances are the government will forfeit the tax’s owed until a later date and time. In other words the debt will be rolled over.
This does one of two things. Firstly it prevents a out side interest from picking up cheap shares based on the value of the debt.
This is a long shot. If the government can obtain two thirds of there tax debt they will go with the new purchaser then risk financing the existing group.
Now if the new group of investors should come up with collateral on all of the tax debt owed then kiss your capital goodbye.
There is a saying that some organizations are to big to fail. This was directed toward the eighties when interest rates were crazy. It’s not the case today as there are very large and very solvent institutions in today’s market looking for places to park there cash on a bargain.
Folks like it was said she is a hot potato. Don’t get burnt. Have fun with it and don’t be risking the kids college funds on it.
Jack be nimble Jack be quick and don’t be letting Jill down by not jumping over that falling candle stick.
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