What happens to shareholders money if a company goes bankrupt?

Answer 1

First, "investor" is a term for those who own stock in a corporation and share in the profits...stockholders...in this instance, stockholders of a corporation that does banking business. Stockholders in a corporation doing banking business are treated the same as stockholders of any other corporation. They can gain if the stock goes up in value, or alternatively, they are at risk up to the limit of their investment in the stock.

Depositors (account holders) in a bank are entirely different. Their deposits are LIABILITIES of the bank. They in essense are creditors. However, virtually all banks (there are some exceptions, and some accounts even within those banks are not included), are protected by government or private insurance. (Thats what the FDIC you see regularly is). Under this program, each account is insured by an outside party upt to a reasonably high maximum, per depositer. If the bank fails (goes bankrupt), those account holders are paid in full under that insurance program.

Answer 2

It all depends on the proceedings in the bankruptcy court, the amount of assets to be re-organized or liquidated, what kind of bankruptcy, and the kind of stock you are talking about. No one can effectively answer this question without more specifics from you.

Answer 3

Their BK protects THEM from THEIR creditors...not others from not paying them! Duh. In fact, as the BK company now has the court protecting it, and helping it and it's creditors do everything possible to secure all the Cos assets (your debt is their asset) to distribute and pay the Cos creditors....it will be harder to not pay them now as they have the law, and many interested parties on their side. Just like before the BK, your loan (like any assset) maybe sold by them (and in fact may actually be owned by another already, you just don't know it and they are just "servicing" it for that other), you have no say or interest in it. Your obligation remains the same - repay the money you borrowed as agreed or face legal action.