CompuServe Messages

"If I was trying to avoid bankrupcy what I would do is try to scare my creditors into thinking they had better re-negotiate the loans. Chances of them getting anywhere near their money back is slim to none if Commodore was forced to liquidate. There just isn't enough assets to cover all of the money they owe. Remember Commodore did not go into bankrupcy proceedings. The real question is 'why?' Bankrupcy laws are designed to protect the business and the investors of the business." Mark: You've got the wrong idea about bankruptcy, particularly Chapter 11. Bankruptcy laws protect the creditors, with the secured creditors getting the highest degree of protection. Investors will almost always get the short end of the stick in a bankruptcy because they aren't creditors. These days it is frequently the creditors who don't want to company to resort to bankruptcy, especially a Chapter 11. Absent fraud or gross mismanagement, a Chapter 11 petitioner remains as "debtor in possession". Most often, it will be the unsecured creditors who really get the shaft. Banks and other secured creditors are more and more arranging what are called "packaged bankruptcies", a settlement being reached before the bankruptcy petition is filed. At this point in time, Commodore could enter a Chapter 11 or stay out of it and probably acheive the same result: a compromise of its secured debt. The real issue is whether or not Commodore can gain additional working capital and market share. I'd be inclined to say yes to the former and no to the latter. Jerry