Originally posted by Hugh GlassFirst, I don't know what theory you're talking about. Nobody's given a theory. This is accounting and finance 101. In fact, I still have my old accounting and finance books sitting in a stack right over there. I can pull quotes out them that say exactly the same things I'm saying.
So that pretty much kills your theroy that they can't sell assets and stay in business.
Second it actually PROVES my point not disproves it. They sold the assets to convert long-term assets to cash (or current assets). There would be no reason to do that unless what I said was true.
Third, You're presupposing that any company facing bankruptcy is on the brink of it at this very moment. Obviously that's not true. A company could be having financial troubles but still not have to actually face bankruptcy for years. They would have time to sell off long term assets in that case. What we were talking about is a company on the brink on bankruptcy which is obviously a different case.
1 edit
My God... 4 pages of Marauder, ATY and kunsoo just spewing ignorance when one little Google search would have saved them all of the trouble.
It seems every thread on here is the same. We go in circles for page after page until 50 pages later everyone realizes I was right again. Then FMF joins in, knowing he's wrong, but just trolling to annoy me.
I wouldn't mind so much but its this kind of ignorance that's destroying the country right now. If you 3 (and people like you) weren't out constantly misinforming people I seriously doubt Obama would be President right now and we wouldn't be facing the fiscal mess we're facing. You should consider the consequences of your actions. There are people who's lives are wrecked right now and its directly attributable to you 3 (and people like you) spreading ignorance.
1 edit
Originally posted by savage4731LOL...
My God... 4 pages of Marauder, ATY and kunsoo just spewing ignorance when one little Google search would have saved them all of the trouble.
It seems every thread on here is the same. We go in circles for page after page until 50 pages later everyone realizes I was right again. Then FMF joins in, knowing he's wrong, but just trolling to annoy me.
It's not worth it.
I'll just say--and I mean it honestly--that I enjoy reading your posts, savage4731.
1 edit
Originally posted by savage4731[...] Hurry and try and make a point. I'm getting bored with you. I don't mind debating things but explaining them is boring. I'm not here to be your personal tutor. If you're ignorant that's a you problem not a me problem.
Oh joy. another inane, nonsensical rambling post to answer with no point behind it. Just random sentences thrown together.
None of this bravado of yours will change the fact that total assets are a huge factor in determining the capacity to pay debts. I have pointed this out. no1. has pointed it out. Now Hugh Glass has pointed it out too. And I think wittywonka would make the point, but cannot be bothered at the present time.
Originally posted by savage4731There would be no reason to sell off assets to pay debts if there were no debts to pay. That's true. It's a kind of surreal point for you to be making, though. There would be no reason to convert long-term assets if there were no debts: thanks for that. But if they did sell off some of their assets - as you mention - in order to pay debts then quite clearly you are wrong to claim that total assets are not a factor in determining whether or not someone is able to pay their outstanding debts.
Second it actually PROVES my point not disproves it. They sold the assets to convert long-term assets to cash (or current assets). There would be no reason to do that unless what I said was true.
Third, You're presupposing that any company facing bankruptcy is on the brink of it at this very moment. Obviously that's not true. A company could be having ...[text shortened]... ere talking about is a company on the brink on bankruptcy which is obviously a different case.
1 edit
Originally posted by no1marauderOf course you're right that assets are taken into account in a 7, but it is possible for a 7 to be granted when a company's assets exceed the value of its debts. Maybe the assets are illiquid or maybe the company is incapable of managing the assets through a liquidation without a section 362 stay against creditors' actions. It's also conceivable that nobody running the business is interested in taking responsibility for the process of liquidating the assets to pay off the debts and thus they just file a 7.
A bankruptcy liquidation is when a company is insolvent i.e. its debts exceed its assets. So there are no assets after the debts are paid off in a bankruptcy (in general any physical assets are auctioned off and the proceeds go to creditors). So there goes your "theory".
My second sentence was referring to what common stockholders are ent ...[text shortened]... e given some statutory "rights" like receiving certain information on a timely basis, etc.).
Alternatively, there may be a chapter 11 proceeding (which are common even where the company's assets are more than its debts) that is forced into a 7 when no plan is approved by the creditors or even an involuntary 7 filed by the creditors because their debts are not being paid. AFAIK, there is no provision in the Code that requires that the company's debts exceed its assets to get a discharge.
Of course, it's also true that in the vast majority of cases, a bankrupt company's debts exceed its assets.
1 edit
Originally posted by savage4731Then you are using a nonstandard definition. The standard definition for "available asset" is:
"available" assets is layman terminology for current assets (which is exactly what I said). Thats what current assets are.
Your link agrees with me.
A person's or a firm's asset that is not being used as collateral for a loan and is therefore available for general use or for sale.
http://financial-dictionary.thefreedictionary.com/Available+Asset
Thus, plant, equipment, etc. are all "available assets" unless they are being used as collateral for an existing loan.
I have no idea what your "current assets" mean. If you are using the standard definition, there is no difference in bankruptcy between "current assets" "fixed assets" and other assets.
Originally posted by sh76You are correct; my second statement was too sweeping. The circumstances you mention are theoretically possible though I doubt they occur in more than a relative handful of cases a year.
Of course you're right that assets are taken into account in a 7, but it is possible for a 7 to be granted when a company's assets exceed the value of its debts. Maybe the assets are illiquid or maybe the company is incapable of managing the assets through a liquidation without a section 362 stay against creditors' actions. It's also conceivable that nobody run ...[text shortened]... o true that in the vast majority of cases, a bankrupt company's debts exceed its assets.
I do stand by my original statement that a common shareholder's chance of getting any distribution from a bankruptcy liquidation is "near zero".