Buying Stock In Bankrupt Companies -

Bankruptcy courts follow an "absolute priority rule" when distributing remaining assets. Common stockholders are at the bottom of this hierarchy: : Banks or lenders with collateral. Unsecured Creditors : Bondholders, suppliers, and employees.

: Major exchanges like the NYSE or Nasdaq often delist companies that file for bankruptcy. buying stock in bankrupt companies

The type of filing determines the fate of the company and its shares: Bankruptcy courts follow an "absolute priority rule" when