Quote:
Originally Posted by noonereal
They will sell off the brands and teh stockholders will be fine. It is only the workers that are screwed.
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Bankruptcy law defines the priority order that people get paid. Stockholders are at the bottom of the list. From memory the order goes something like this.
1) Lawyers
2) Lenders after bankruptcy filing and taxes
3) Unsecured creditors and employees
4) Shareholders
Secured creditors get whatever asset(s) was pledged as security.
In most cases there is not enough money to pay everyone. Unsecured creditors usually get pennies on the dollar and shareholders get diddly squat.