Legal Question in Bankruptcy in California

Chapter 11 bankruptcy and its effect on stock.

I just had a quick and basic question about Chapter 11 bankruptcy:

I'm a novice in the stock market. I've been playing around with a few and just today, a company that I have a few stocks in filed for Chapter 11 bankruptcy.

My question is this: how does this affect the stock (aside from looking bad to investors)? My main concern is whether or not this proceeding--or any subsequent bankruptcy filing, for that matter--can make the stock go to zero: can this actually happen?

Thanks in advance.


Asked on 8/13/99, 7:40 pm

1 Answer from Attorneys
Ken Koury Kenneth P. Koury, Esq.

Re: Chapter 11 bankruptcy

No one can predict for sure what it will do to the stock but your shares would likely only go to zero if the company went out of business.

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Answered on 8/18/99, 12:50 am


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