What about the stock?

[bikeguy]

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]

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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.