Quote:
Originally Posted by Hylton
What would happen to your stock if GM goes Chapter 11? I am trying to remember what happened to the Chrysler shareholders when it went under.
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Okay, got my answer....
Here is how the SEC summarizes what may happen to stock- and bondholders during Chapter 11:
"During Chapter 11 bankruptcy, bondholders stop receiving interest and principal payments, and stockholders stop receiving dividends. If you are a bondholder, you may receive new stock in exchange for your bonds, new bonds or a combination of stock and bonds. If you are a stockholder, the trustee may ask you to send back your stock in exchange for shares in the reorganized company. The new shares may be fewer in number and worth less. The reorganization plan spells out your rights as an investor and what you can expect to receive, if anything, from the company."