Chap 7 & 11 -- who has to approve this?

[shon7]

In the event a company wants to declare bankruptcy and file for restructuring - is the board approval all that is needed?

Are their any barriers to such filings in terms of employees/ shareholders/ bondholders?

 

[storminpilot]

The company will file when it does not have enough cash to meet its current obligations. If a company does not have enough cash or cannot secure DIP financing they usually head right to Chapter 7.




http://www.air-transport.org/econ/d.aspx?nid=6207

No matter how you look at it, bankruptcy is bad. And the track record of those who file and then make it is not good, only America West and Continental so far out of ?????

 

[climbhappy]

those who might have a say:

employees: none really. The CEO and CFO are most likely shareholders and most informed.

shareholders: they can vote if their stock has voting privaleges. whatever is voted is usually the officers and board makeup.

bondholders: they're actually creditors of the corp since bonds are a debt instrument and not an equity

the secured creditors get to approve the reorg plan or have first preference in the event of an asset sale if company is liquidated. they would be paid back first. common stockusually wiped out in a BK. I'm not sure if a bondholder has preferred creiditor status. i would think so since a bond is a security.

 

[SWA/FO]

Kitty Junk, I mean Kitty Hawk made it out of Ch. 11, right?