BBBY - Bed Bath & Beyond Stock: How it Will Be Affected by Bankruptcy
Bed Bath & Beyond Stock ( NASDAQ:BBBY )
Bed Bath & Beyond ( NASDAQ:BBBY ) got a notice of default from JPMorgan on one of their main credit lines last week. When you add the default notice to the fact that a bond interest payment is due on February 1, bankruptcy will likely be filed soon. Due to a big drop in assets over the last two years, it’s unlikely that stockholders will get anything back when the company goes bankrupt. That means Bed Bath & Beyond stock price will likely fall to $0.00.
How the Reorganization Process in Bankruptcy Works
Retail investors don’t understand how reorganization works in bankruptcy, so let’s go over how it works. When a company goes bankrupt, the stock symbol usually gets a “Q” at the end to show that the company has stopped paying its debts. The important thing to remember is that this new symbol is not the new shares of the company. They are the same shares that are already past due. In bankruptcy court proceedings the common shareholder is in the very back of the line to be repaid. Repayment in bankruptcy goes in the following order:
- Secured Creditors – loans that are backed by specific assets, similar to how a home mortgage is backed by the value of a house in foreclosure.
- Employees – things like unpaid wages may have to be collected in bankruptcy.
- Unsecured Creditors – typically bonds issued by the company, and these can be further ranked as senior or non-senior debt.
- Shareholders – s...
Click here to read the full article on PressReach.com .Subscribe to the PressReach RSS feeds:
- Featured News RSS feed
- Investing News RSS feed
- Daily Press Releases RSS feed
- Trading Tips RSS feed
- Investing Videos RSS feed
Follow PressReach on Twitter
Follow PressReach on TikTok
Follow PressReach on Instagram
Subscribe to us on Youtube