I see you are from Germany. Perhaps bankruptcy laws are different there. Under US bankruptcy law the shareholder is last in line to get anything in a bankruptcy. It is virtually unheard of for shareholders to receive anything in a bankruptcy. Exceptions to this generalization are EXTREMELY rare and even those few rare exceptions virtually always involve special circumstances, such as the Texaco bankruptcy. I believe the shareholders survived that one.
The priority for payout in a bankruptcy runs roughly like this. The government gets paid first (taxes). Then wages to workers get paid, including any back wages owed. Then various forms of secured debt, i.e. debt backed by collateral, then unsecured debt. At the very tail end of the priority list come the shareholders. If the creditors don't get paid what they are owed then the shareholders lose ownership of the company. Their shares are cancelled and become worthless. If the company emerges as an operating company it does so under new ownership, usually being owned by the former creditors as partial compensation for not having been paid all the money they were owed.
In case Kodak resurrects from bancruptsy as the same legal entity, the old shareholders are still in hold of their part/share of Kodak.
This of course does not say anything of a future stock price nor of a future dividend from Kodak.
Shareholders are debtors, how could they get their money back anyway?
Or do I miss something?
The priority for payout in a bankruptcy runs roughly like this. The government gets paid first (taxes). Then wages to workers get paid, including any back wages owed. Then various forms of secured debt, i.e. debt backed by collateral, then unsecured debt. At the very tail end of the priority list come the shareholders. If the creditors don't get paid what they are owed then the shareholders lose ownership of the company. Their shares are cancelled and become worthless. If the company emerges as an operating company it does so under new ownership, usually being owned by the former creditors as partial compensation for not having been paid all the money they were owed.
What I really love about the whole deal is that the same people who could not manage to succeed with the company when they were profitable, will now try to succeed with much fewer resources.
I doubt the ability of Perez to turn around a go kart inside a football field.
What I really love about the whole deal is that the same people who could not manage to succeed with the company when they were profitable, will now try to succeed with much fewer resources.
You doubt the ability of Perez to turn around Kodak???:eek:
As I said in a posting back in August 2012:
I agree that the management is more concerned with their pockets than saving the company. They are making one monumental blunder after another.
I saw the problems starting in the later '60s with the rise in MBAs with no product experience in management positions. As I've said many times, "Two things have led to the downfall of US Corporations: the MBA and the spreadsheet." With the computer spreadsheet, the MBAs were able to 'fiddle' with the figures and go for short term gains at the expense of long term gains.
Car Guys vs. Bean Counters: The Battle for the Soul of American Business by Bob Lutz talks about the issue in the auto business, and I certainly saw it at Kodak.
It's not just a US problem it's been just as bad in the UK.
Ian
We've sucessfully hired a few MBA's in our company. They get to sweep floors a few years, then might
be taught to stock shelves. If it appears they can work, they might eventually be assigned paperwork
tasks and gradually acquire a little actual responsibility. Any corporation stupid enough to drop them
into anything resembling a top tier is doomed.
Every public company in the US would seem to be doomed then.
Most good MBA programs require substantial experience to get in.
My confusion arises from the basic question: Where's the The Buck Stops Here paperweight?
Inexperienced MBAs can and often do point in silly long-term directions. But doesn't the boss' desk still have that paperweight sitting on it? And the veto power that goes along with it?
The 'Boss' is also compensated on the short term performance of a company. Everybody wants it now.
Best of all is the Bonuses paid for the losses !!!
Ian
Roger - corps are dropping like flies, and generally due to sheer stupidity ... lemming mentality. If one corporation shoots themself in the foot, their competitiors will do exactly the same.
Whenever possible, I try to deal with privately-held manufacturers which are at least somewhat buffered from the worst of this, though there is usually some smart-alec MBA who manages to make a mess before eventually
getting fired.
It's a parasitic profession, kinda like going to a surgeon who had never even taken a biology class or dissected a frog first. Part of my job is predicting what direction mfgs will head into.
If a bunch of twenty-something MBA's get dropped into the hierarchy, it's time to run away from that outfit - fast. Or if you work for someone like that, look for another job fast. Usually the only person more incompetent is the CEO who hired them.
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