What happens to your shares if a company goes bankrupt?

xen88 · 16 May 2020

What will happen to your shares if the company goes bankrupt? Will you get a warning that the company is shutting down?

Bill M · 16 May 2020

The shares just delist from the stock exchange and no longer can be sold or bought. They don't usually give warnings, but you never know how it will all come about. When it has happened to me the shares were already delisted before any warning signs.

There is one very good way to sell these delisted/failed stocks and it is at this link, good luck.
https://www.delisted.com.au/

Value Collector · 17 May 2020

xen88 said:
What will happen to your shares if the company goes bankrupt? Will you get a warning that the company is shutting down?

After they are delisted, an administrator will Either reorganize the company with fresh capital or “wind up” the company.

Which basically means

1, all the Company’s assets will be sold, and all the funds owing to it by others will be collected.

2, these funds are then used to pay off all debts in order of priority.

3, any remaining funds are distributed to the shareholders.

As a shareholder you only own the equity of the company, other Investors such as the debt holders (bond holders, note holders, banks etc) own the rest of the company.

The debt holders have first claim on the companies assets to pay back their loans and interest.

shareholders / equity owners are the last to get paid but they get to claim all profits over and above debt holders interest and all capital over and above debt holders fixed principle.

qldfrog · 17 May 2020

Value Collector said:
After they are delisted, an administrator will Either reorganize the company with fresh capital or “wind up” the company.

Which basically means

1, all the Company’s assets will be sold, and all the funds owing to it by others will be collected.

2, these funds are then used to pay off all debts in order of priority.

3, any remaining funds are distributed to the shareholders.

As a shareholder you only own the equity of the company, other Investors such as the debt holders (bond holders, note holders, banks etc) own the rest of the company.

The debt holders have first claim on the companies assets to pay back their loans and interest.

shareholders / equity owners are the last to get paid but they get to claim all profits over and above debt holders interest and all capital over and above debt holders fixed principle.

But let's not fool anyone,
If this happens to you, your shares are now worthless, 0 dollar so sell them asap to delisted link above so that you can at least claim a lost this financial year

kahuna1 · 17 May 2020

xen88 said:
Will you get a warning that the company is shutting down?

Often not. Sometimes out of the blue it occurs. Company lies, is found out and poof.

If in doubt, get out. Or risk as small an amount as one can afford to loose.
Even accounts may seem fine, announcements give no hint .. and then its gone.

A hard one in these times. Finance can be withdrawn and bank demand they are repaid which is making the issue even harder because any other lender would be scared. Issuing shares in a distressed company would either not work or dilute it so much as to make it worthless.

I suspect we will see more of this as time goes on via CV19.

Value Collector · 17 May 2020

qldfrog said:
But let's not fool anyone,
If this happens to you, your shares are now worthless, 0 dollar so sell them asap to delisted link above so that you can at least claim a lost this financial year

Yep, most of The time.

years ago I had a share go bankrupt, I held them through the whole process just to see what happened, it took about 18 months but I ended up being issued with new shares in a new reorganized group but I had been diluted to about 1cent on the dollar for what the old shares were worth at their peak.

explod · 17 May 2020

Yep been there a few times with wild speks but the upside pays overall, got into NST at $1.10 and my first trade 1968 a thing called Exoil at 10cents and sold 6 months later at 90 cents. They went broke as no gas was found. But that was an insider as I used to drink with the workers at Hughenden when I was shearing there. However it taught me early to sniff about.

marys · 21 May 2020

I think they are closed all. I suggest you read more about Insolvency and Bankruptcy.

marys · 25 May 2020

marys said:
I think they are closed all. I suggest you read more about Difference Between Insolvency and Bankruptcy | Differencebtwn.

It seems interesting.

dankshares · 29 May 2020

Can you transfer these shares to a different HIN/SRN for $0 and claim the loss on tax or is using delisted the only option?

What happens to your shares if a company goes bankrupt?

xen88

Bill M

Self Funded Retiree

Value Collector

Have courage, and be kind.

qldfrog

kahuna1

Value Collector

Have courage, and be kind.

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