"Interest" is the term used in bankruptcy documents to refer to the Equity interest of stockholders.
Stock is the evidence of ownership in a corporation. Stockholders have invested their money in a corporation and in return they are considered part owners. Corporations offer stock certificates to the stockholders as evidence of their ownership. Ownership has its privileges and common stock holders may have the ability to vote on mergers, help elect the board of directors and if the company is profitable, the stockholders may make a lot of money. A stockholder can maintain their interest in the corporation or their stock until they decide to sell it. Services to buy and sell stocks are provided by a stockbroker. The sell price changers every day and is determine by the stock market or the market of buyers and sellers.
Stockholders who have an equity interest in a company rarely receive any money if a company stops all business operations and files for Chapter 7 Bankruptcy. Money recovered from the Liquidation is generally paid to all creditors. Stockholders may also be the last in line to be paid if a company is declared insolvent and files for Chapter 11 Bankruptcy. If a company is declared insolvent this means that the company has more liabilities than assets and any outstanding stock is worthless. Stockholders may be paid if all the creditors are paid and the company has remaining assets.
More Help on Interest
- Equity - Equity is the amount or value of an item or property after the claims against it, such as liens or mortgages, have been subtracted. Individuals who are filing for Bankruptcy need to consider the amount of equity they have in there home and whether or not they wish to protect their home in the bankruptcy process. - read more
- Liquidation - Chapter 7 Bankruptcy is known as a \"liquidation\" bankruptcy and creditors will be paid from the liquidation of the debtor\'s assets. - read more
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