Originally Posted by
tommyleo
While Chapter 7 may be the best move to allow US to survive, wouldn't Chapter 7 wipe out all shareholder value? Or does it depend on the structuring?
Equity (shareholder value) is wiped out in Chapter 7 unless the sale of the assets is sufficient to pay the creditors. The order is: secured creditors, unsecured creditors, equity holders/shareholders. Fees to counsel and consultants are approved by the court and come off the top.
Given the assets here and the weakness of the industry, I can't see the assets having enough value to pay all the creditors....