View Poll Results: Which is the Riskiest Investment?
Ford Bonds
0
0%
GM Bonds
8
53.33%
Barry Bonds
7
46.67%
Voters: 15. You may not vote on this poll
Which is the Riskiest Investment?
#11
05-25-2006, 04:33 AM
Re: Which is the Riskiest Investment?
Typically bond-holders are the first ones that have to be repaid in bankruptcy court. Before suppliers, stock holders, and even employees in some cases.
) ... Yep, bondholders are in the group of "unsecured creditors" who get paid after "secured creditors" and most definitely *before* stockholders. However, if the company is liquidated, there is certainly a chance that paying the secured creditors will exhaust the proceeds of liquidation -- which means that there is a chance that bondholders get nothing.
A lot more can be found at http://www.sec.gov/investor/pubs/bankrupt.htm
#12
05-25-2006, 05:03 AM
Re: Which is the Riskiest Investment?
AZCivic,
Yes, that is true, IF the physical assets of the company exceed the value of the debt. I believe I read somewhere that GM has over 300 BILLION in debt out there. I doubt a bunch of 20 year old automobile factories are going to sell for over 300 billion. I suspect as David Harville notes, that the subordinated debt holders of GM bonds will have a rather rude awakening if GM does declare bankruptcy.
Eric
Yes, that is true, IF the physical assets of the company exceed the value of the debt. I believe I read somewhere that GM has over 300 BILLION in debt out there. I doubt a bunch of 20 year old automobile factories are going to sell for over 300 billion. I suspect as David Harville notes, that the subordinated debt holders of GM bonds will have a rather rude awakening if GM does declare bankruptcy.
Eric
#13
05-25-2006, 05:18 AM
Join Date: Apr 2005
Location: Lewisville (Dallas), Texas
Posts: 3,155
Re: Which is the Riskiest Investment?
Originally Posted by williaea
AZCivic,
Yes, that is true, IF the physical assets of the company exceed the value of the debt. I believe I read somewhere that GM has over 300 BILLION in debt out there. I doubt a bunch of 20 year old automobile factories are going to sell for over 300 billion. I suspect as David Harville notes, that the subordinated debt holders of GM bonds will have a rather rude awakening if GM does declare bankruptcy.
Eric
Yes, that is true, IF the physical assets of the company exceed the value of the debt. I believe I read somewhere that GM has over 300 BILLION in debt out there. I doubt a bunch of 20 year old automobile factories are going to sell for over 300 billion. I suspect as David Harville notes, that the subordinated debt holders of GM bonds will have a rather rude awakening if GM does declare bankruptcy.
Eric
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