On Wednesday, May 5, 2021 at 10:45:44 AM UTC-4, Ralph Mowery wrote:
In article ,
says...

It's not unusual for companies to go bankrupt, for the stockholders to be
wiped out and for the company to be able to continue in business.
Stockholders are last on the list of those with any claim. In the case of GM,
other creditors and bondholders were ahead of GM. GM didn't have the
means to pay the bondholders, they wound up taking equity positions in
lieu of some of their bond claims as part of the bankruptcy negotiations.
When that happens, stockholders are
typically left with nothing. I suspect similar happened with the power
company. And it's not like a meteor struck GM one day, the stockholders
had plenty of time to get out during the long ride down. I would bet a
majority of stockholders at the end had taken those positions only in the
last months, betting that GM would not go bankrupt.

NRA is totally different. Starting with that AFAIK, they have not actually
gone bankrupt, just started the process. And they are not upside down,
they are doing it on the claim that they need that protection because of
the pending lawsuits from NY state. I don't know if anything like that has
ever been used successfully as a valid reason for bankruptcy. Seems
there is a good chance it will not be allowed.





I guess that GM is one of the things that is 'too big to fail'. Looks
to me that all the assets of the company should be sold off and the bond
holders paid off and if anything is left the stock holders get it.

That is one option in bankruptcy but I'm pretty sure if you did it
with GM the result, that the stockholders got nothing, would have been
the same and the results for the bondholders, most other creditors
and especially the employees
would have been worse. That's the calculation, negotiation, that went on
before they finalized the bankruptcy.







However GM stays in business and the stockholders are left with nothing.
I bet the big wheels at GM got bonuses for the 'good job' they did.

I doubt they got much from the bankruptcy but I would bet they got paid
well in the years leading up to it.




A power company in California was another company that left the stock
holders holding the bag. The power never stopped following. The
service was too much to shut off and sell the power poles and wires to
pay off anyone.

From what little I know about the NRA it was a mission of the AG or
someone else to do them in. That is the reason of all the lawsuits and
other things. I think the NRA was going to move to another state to get
away from that.

Right. The question here is whether you can legitimately go into bankruptcy
to try to avoid it when actually your actual, current finances are perfectly fine.