What about the stock?

bikeguy

Advanced
Aug 21, 2002
111
102
If United does file for bankruptcy does the stock become worthless or do they issue new stock? The reason i ask
is, I read a news article that explained that if they file chapter 11 the employees esop fund will be wiped out. Anyone know anything about this?
 

Bear96

Veteran
Aug 20, 2002
2,926
122
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On 8/21/2002 9:57:41 AM

If United does file for bankruptcy does the stock become worthless or do they issue new stock?
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Both. Generally in a Ch.11 bankruptcy, count on current publicly traded stock becoming worthless, and new stock starts being traded once the reorganization plan is approved. Holders of the old stock generally are left with nothing, or at most maybe a couple of pennies on the dollar.

ESOP stock tends to have its own set of rules though compared to publicly traded, and I don't know what happens to the current ESOP shares.