Bankruptcy 101

Discussion in 'Economy' started by CrusaderFrank, Nov 20, 2012.

  1. CrusaderFrank
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    CrusaderFrank Diamond Member

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    When a Company files bankruptcy it is seeking court ordered relief from its debts and obligation.

    With me so far?

    Filing bankruptcy does not mean the company stops all operations and disintegrates

    Still there?

    Bankruptcy allows a company a chance to reorganize their debt by reducing interest rate and getting more favorable terms and usually, they give something of value in return to the debtors.

    Filing bankruptcy does not mean the company stop all operations and disintegrates
     
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    Last edited: Nov 20, 2012
  2. del
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    del BANNED

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    it does when the company filing seeks to liquidate its assets

    thanks for stopping by
     
  3. Nova78
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    Nova78 Silver Member

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    Yea,sure thing Einstein. :bowdown:
     
  4. Luissa
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    Luissa Annoying Customer Supporting Member

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    You do have a point.... But Hostess was going to close down operations, told retail stores they wouldn't be getting anymore shipments, and planned on selling off their recipes.
     
  5. CrusaderFrank
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    CrusaderFrank Diamond Member

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    That's a Liquidation bankruptcy, but the filing does not mean the company stops operation.

    For example, GM filed for Chapter 11 which is Reorganization. Can you say "reorganization"?

    Hostess Filed Chapter 11 as well, and what type is that?

    That's right, a "reorganization"

    thanks for stopping by and filling in for TM
     
  6. Toro
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    Toro Diamond Member

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    I imagine someone will buy the Hostess brands.
     
  7. jillian
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    jillian Princess Supporting Member

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    it depends on what chapter of the bankruptcy law they use. different ramifications for each.

    and it does mean, either way, that their creditors get screwed...
    which causes more bankruptcies...

    and when they lay off people... they end up in bankruptcies...

    which further hurts creditors...

    and causes further bankrtupcies.

    50% of personal bankruptcies occur because of unanticipated medical expenses
     
  8. Luissa
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    Luissa Annoying Customer Supporting Member

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    Then why did the company say they were going to go out of business? Maybe you should explain to the CEO what chapter 11 is.

    "The company had warned employees that it would file a motion with U.S. Bankruptcy Court Friday seeking permission to shutter its operations and sell its brands if plants hadn't resumed normal operations by a Thursday evening deadline. The deadline passed without a deal."

    ""I don't know if they thought that was a bluff," CEO Gregory Rayburn said on CNBC Friday. He said the financial impact of the strike makes it "too late" to save the company even if workers have a change of heart. That's because the clients such as retailers decide to stop carrying products when supplies aren't adequate.

    Rayburn said he's hopeful that the company will find buyers for its roster of about 30 brands, which include Ho Hos, Dolly Madison, Drake's and Nature's Pride snacks. The company books about $2.5 billion in sales a year."
    http://m.courierpress.com/news/2012/nov/16/hostess-says-its-going-out-of-business-after/
     
  9. CrusaderFrank
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    CrusaderFrank Diamond Member

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    He had to change it to a liquidation when it became apparent that there was no hope of reorganization due to the Union strike
     
  10. Luissa
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    Luissa Annoying Customer Supporting Member

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    So you created this thread for what reason?

    I understand people don't understand what it means, I worked at Kmart when they filed. I won't talk about how many people asked me when we were going to have our closing sale.
     

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