Bankrupt company owes money....?

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What if a company owes me my money and then it gets bankrupt?
I mean, what does the law states in this case?
 
Usually - assets of the company are sold and given to the debtors. If they owe you money, then you can expect to get some money from the sale of assets. Depends on the kind of debt too. Do you have sufficient proof?
 
when the company says it doesn't have money to pay people to whom it owes money , The court has to declare it INSOLVENT (bankrupt) no1 else can .

After that the court appoints a person (official liquidator) who sells all the assets of the company and distributes THIS amount (which it recovered frm assets) to the ppl like u in a ratio and court will state this ratio .

Like a company owes 1000 to people and after selling the asset the liquidator recovers 200 . So 200 will be given to the person who owes rs1000 . or u can say if the company owes you X amount u get back 20% of X from the company .

Hope this helped :)
 
It depends

After the assets are sold off, they debts are cleared in a particular order

It depends on where you stand in that order, and if any money is left by the time your turn comes

IANAL applies
 
rahulsarna said:
when the company says it doesn't have money to pay people to whom it owes money , The court has to declare it INSOLVENT (bankrupt) no1 else can .

After that the court appoints a person (official liquidator) who sells all the assets of the company and distributes THIS amount (which it recovered frm assets) to the ppl like u in a ratio and court will state this ratio .

Like a company owes 1000 to people and after selling the asset the liquidator recovers 200 . So 200 will be given to the person who owes rs1000 . or u can say if the company owes you X amount u get back 20% of X from the company .

Hope this helped :)
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u sure about that?

AFAIK certain types of debts are paid first, and some types later.
 
mehrotra.akash said:
u sure about that?

AFAIK certain types of debts are paid first, and some types later.
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Its a complex process.

As what i heard is debt instrument holders get first preference.

Whereas shareholders are given least.But it all depends on whose bankruptcy we talking about.Whether its a listed company or just a bank or any other normal company.
 
MAGNeT said:
Its a complex process.
As what i heard is debt instrument holders get first preference.

Whereas shareholders are given least.But it all depends on whose bankruptcy we talking about.Whether its a listed company or just a bank or any other normal company.
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Exactly, according to principle of Absolute priority it is the creditors who first get hands on the firms assets to settle their outstanding debts and then bond holders get their dibs on whatever is left followed by preferred shareholders. In reality, common shareholders often receive nothing as there is usually very little leftover once a firm has paid all its debts.
 
According to me first the Debenture holders and creditors for the company are paid , then the preference share holders and the remaining amount if left is split between equity share holders
 
Famous case of GTB(global trust bank) shareholder is they got nothing ,later the comapny was merged with obc.
 
Which company are you talking about?? Is it Kingfisher, if yes then even a 5 year old kid would have known that its going to declare bankruptcy.
 
mehrotra.akash said:
u sure about that?

AFAIK certain types of debts are paid first, and some types later.
Click to expand...

the order is : 1. Secured Creditors of the company

2 . Unsecured Creditors of the company

3 . Preference share holders

4. Equity share holders

Since the company owes him money he either belongs to category 1 or 2 nd hopefully hll get wt the court declares
 
^^ A slight adjustment:

1. Any money owed to government

2. Salaries to employees

3. Secured creditors

4. Unsecured creditors

5. Preference shareholders

6. Common equity shareholder.
 
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