bankruptcy (redirected from bankrupt)

Bankruptcy

The state of a person or firm unable to repay debts.

Notes:

If the bankrupt entity is a firm, the ownership of the firm's assets is transferred from the stockholders to the bondholders. Shareholders are the last people to get paid if a company goes bankrupt. Secure creditors always get first grabs at the proceeds from liquidation.

See also: Absolute Priority, Bankruptcy Risk, Bond, Chapter 11, Chapter 7, Discharge in Bankruptcy, Prepackaged Bankruptcy, Senior Security, Stalking Horse Bid, Stockholders Equity, Technical Bankruptcy, Vulture Fund

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Bankruptcy

Inability to pay debts. In bankruptcy of a publicly owned entity, the ownership of the firm's assets is transferred from the stockholders to the bondholders.

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bankruptcy

The financial status of a firm that has been legally judged either to have debts that exceed assets or to be unable to pay its bills. Formal bankruptcy may result in reorganization and continued operation of the firm or it may require liquidation and distribution of the proceeds. In either case, most security owners, especially shareholders, are likely to suffer losses. Stock transaction tables indicate that a company is in bankruptcy proceedings by appending vi or q immediately before the name of the stock. See also Chapter 7, Chapter 11, reorganization.