- #1
zoobyshoe
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How this is supposed to work out is a mystery to me and someone will have to explain it. Here's the story:
http://www.reuters.com/article/us-usa-energy-bankruptcy-analysis-idUSKBN13X0EG
How is it the creditors automatically agree to take ownership of an ostensibly sinking ship, and what happens to all the shareholders? If they flat out lose their investment, doesn't that create some sort of economic depression? Doesn't the increase in this tactic taint oilfield service firms as a bad investment?
http://www.reuters.com/article/us-usa-energy-bankruptcy-analysis-idUSKBN13X0EG
A bankruptcy filing allows a service company to restructure under a court-supervised process in as little as two months. Creditors generally take ownership of the companies in return for forgiving debt, and shareholders generally lose all or nearly all of their investment.
How is it the creditors automatically agree to take ownership of an ostensibly sinking ship, and what happens to all the shareholders? If they flat out lose their investment, doesn't that create some sort of economic depression? Doesn't the increase in this tactic taint oilfield service firms as a bad investment?