Originally Posted by socrates
FYI NWA has had NEGATIVE Shareholder Equity ever since their IPO following their LBO, so the simple matter of having more liabilities than assets does not make a company bankrupt
I actually didn't say 'bankrupt,' the phrase I used is technically bankrupt. The company is technically insolvent; it has insufficient assets to cover its debts. If it had a major cash flow issue, it would disappear (or course, there are mechanisms, C11, to forestall that problem). On the bright side, NW had nice, positive ROE for those years when it had negative earnings.
