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In lmost all instances, their interest in the company is given up to the crediors that are not being fully paid by the comapny. Basically, the creditors end u buying the Co for the debt they agree to not be paid. That is a fair exchange for the stockholders not paing the debt,,,basically yu own stock in a company that is insolvent - it' debts are more than it's assets...hence you own a debt! Understand stockolders are equity (in an insolvent Co in this case), not creditors - they own the Co, the company owes them nothing.

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16y ago

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