What do you do when you own bonds or stocks issued by a bankrupt company?

Ok so you own securities in a bankrupt company. If they’re stock, you’re probably going to be wiped out. If you own bonds, you are a creditor in the bankruptcy proceedings. Depending on how the proceedings go, you may get shares or bonds in the company. Or you may get cash as the company sells off their assets. Often times, you will receive a good chunk (but not all) your par value in either new securities or cash. Generally financial companies have paid out less in default but this is not always the case. You may also be able to sell your bonds on the open market, the market offerings will give you an indication of when and how much the bonds are expected to pay off. However, people may lowball you, and you will probably have to vote on some of the deals in bankruptcy so you will want to work with an advisor.

Municipal bonds are a little different, and the paradigms of municipal bankruptcy proceedings are changing so I won’t go through those. However, many municipal bonds are insured, and the insurer will continue making payments on the issuer’s behalf if they do go into bankruptcy. Read more…

Leave a Reply

You must be logged in to post a comment.

Virginia Beach

Welcome to our web site where we bring you news, financial info and weather updates for Virginia Beach. Along the way we will give you some interesting reads on other topics as well.

Feed Readers

Virginia Beach News

PHOTOS: Hundreds gather across Hampton Roads to protest death of George Floyd

HAMPTON ROADS, Va. (WAVY) — Hundreds have gathered across Hampton Roads to protest the death of Geor […]

PHOTOS: Virginia Beach Heartbreak Through the Lens

VIRGINIA BEACH, Va. (WAVY) — It was just over a week ago since a city employee brought down what may […]

Minneapolis overwhelmed again by protests over Floyd death

MINNEAPOLIS (AP) — Fires burned unchecked and thousands protesting the police killing of George Floy […]

Bus destroyed during protests in Richmond, Saturday service delayed

RICHMOND, Va. (WRIC) – GRTC says one of its buses is a total loss after being set on fire during pro […]

About 100 people gather in Downtown Lynchburg to protest George Floyd’s death

LYNCHBURG, Va. (WFXR) — About 100 people gathered in front of the Lynchburg Community Market Saturda […]

Post Calendar

May 2018
M T W T F S S
« Apr    
 123456
78910111213
14151617181920
21222324252627
28293031