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What happens is the put writer gets hosed.
If a company goes into Chapter 7 bankruptcy, all its stock becomes worthless. Unfortunately for the people who wrote put options on the company's stock, those do NOT become worthless. If the put buyer decides to exercise the option - and he will - the writer has to buy all those shares of worthless stock at the strike price.
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∙ 10y ago
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What happens to a publicly traded company when its stock goes to zero?
you can claim a CAPITAL GAIN LOSS ON YOUR TAX RETURN FOR THE YEAR IF THE COMPANY GOES BANKRUPT that's it.
The significance of the word 'limited' in the name of a company?
it means that the company has limited liability. If the company goes bankrupt they loose only what they invest in the business.
What happens to a bank loan when a corporation goes bankrupt?
The company still has to pay it off, it might even just rest on the owner's, or the person who took it out, hands.
Is it true that market failure occurs when a company goes bankrupt?
Yes, it's true.
If a collection agency goes bankrupt how does someone find out who owns the debt?
Even if the collection company goes bankrupt, you still owe the bank whatever money you borrowed from them. The bank hires the collection company to get that money, so you still owe them
What happens to the government if a company goes bankrupt?
Nothing.
What happens to your warranty when a company goes bankrupt?
If the Bankrupt company is just the retailer then the warranty is still covered by the manufacturer. If the manufacturer goes bankrupt then the retailer covers the warranty. The seller is responsible for a warranty. Clearly if the seller is the manufacturer and they go bankrupt then it's most unlikely that the warranty will remain in force.
What happens to a publicly traded company when its stock goes to zero?
you can claim a CAPITAL GAIN LOSS ON YOUR TAX RETURN FOR THE YEAR IF THE COMPANY GOES BANKRUPT that's it.
The significance of the word 'limited' in the name of a company?
it means that the company has limited liability. If the company goes bankrupt they loose only what they invest in the business.
What happens to your 401k if the company administering it goes bankrupt?
The things it is invested in are separate from the company administering it...the $ are in those assets (stocks/funds) and will simply be transferred to whoever looks after them in the future.
What happens if your city goes bankrupt?
It can not pay its employees or pay for its services.
What happens if NASCAR goes bankrupt?
Well, NASCAR maybe purchased by another company or person. It is too big to just give up on. Someone will buy it.
What happens to a bank loan when a corporation goes bankrupt?
The company still has to pay it off, it might even just rest on the owner's, or the person who took it out, hands.
If a mortgage company goes bankrupt can the company that bought them out legally collect on your old debt?
Yes.
Is it true that market failure occurs when a company goes bankrupt?
Yes, it's true.
If a collection agency goes bankrupt how does someone find out who owns the debt?
Even if the collection company goes bankrupt, you still owe the bank whatever money you borrowed from them. The bank hires the collection company to get that money, so you still owe them
Does a lien hold if the company goes bankrupt?
unless it is written off by the court, it does. I would assume that it would be listed as debt by the party going bankrupt.
