The investors.
Bankruptcy Costs. The first group of debts that need to be paid are the expenses that come up as part of the bankruptcy. Otherwise, the groups managing the bankruptcy would have no motive to handle the process. This is one of the reasons why stocks are a riskier investment than bonds. When a company declares bankruptcy, its stock becomes worthless. The shareholders only get money after all other debts are paid. Since the company was in bad enough shape to declare bankruptcy, this isn't especially likely. When a company goes bankrupt this means that it has more expenses  than profits that they are taking in. It also means that they can  go in front of a court to determine if … they can receive forgiveness  for some of the debts that they owe to their creditors. Answered.  1 These are the creditors to whom the business owes a debt for something with tangible value. 2  In other words, something measurable “secures” the debt. 3  In a Chapter 11 bankruptcy, secured creditors are paid first, sometimes partially through the return of the property. 1 In other words, something measurable “secures” the debt. 2 Save. Justice image by MVit from Fotolia.com. When a company files for bankruptcy, its creditors hope to be paid. The chances of getting paid from bankruptcy proceeds depends on the type of creditor, the amount owed and whether the creditor is considered secured or unsecured.  When a company goes bankrupt, it sells off its remaining assets to pay off as much of its debts as possible. In the eyes of bankruptcy law, not all debts are equal in priority. The bankrupt company must pay off its creditors and shareholders according to an order set by federal laws. This is one of the reasons why stocks are a riskier investment than bonds. When a company declares bankruptcy, its stock becomes worthless. The shareholders only get money after all other debts are paid. Since the company was in bad enough shape to declare bankruptcy, this isn't especially likely. The investors who take the least risk are paid first. For example, secured creditors take less risk because the credit that they extend is usually backed by collateral, such as a mortgage or other assets of the company. They know they will get paid first if the company declares bankruptcy. 1 Secured Creditors-often a bank, is paid first. 2  Unsecured Creditors-such as banks, suppliers, and bondholders, have the next claim. 3  Stockholders-owners of the company, have the last claim on assets and may not receive anything if the Secured and Unsecured Creditors' claims are not fully repaid. Federal rules regulate the order in which creditors receive payment when a company is liquidated through a business bankruptcy. That order is generally based on who assumed the most risk when issuing money to the company. 1 In other words, something measurable “secures” the debt. 2  In a Chapter 11 bankruptcy, secured creditors are paid first, sometimes partially through the return of the property. There is also a pecking order of creditors and investors of who get paid back first, second and last. In this article, we'll explain what happens when a public company files for protection under U.S. bankruptcy laws and how it affects investors. Bonds for near bankrupt companies are usually rated as junk. When your company goes bankrupt, there is a very good chance you will not get back the full value of your investment. In fact, there is a chance you won't get anything back. If a company you've got a stake in files for bankruptcy, chances are you'll get back pennies to the dollar. Different bankruptcy proceedings or filings generally give some idea as to whether the average investor will get back all or a portion of his investment, but even that is determined on a case-by-case basis. Bonds for near bankrupt companies are usually rated as junk. When your company goes bankrupt, there is a very good chance you will not get back the full value of your investment. In fact, there is a chance you won't get anything back.
http://work.chron.com/gets-paid-first-company-goes-bankrupt-7496.html http://www.answers.com/Q/Do_employees_get_paid_when_a_company_goes_bankrupt http://bankruptcy-law.freeadvice.com/bankruptcy-law/business_bankruptcy/paid_bankruptcy.htm http://www.ehow.com/facts_7186308_gets-first-company-goes-bankrupt_.html http://work.chron.com/gets-paid-first-company-goes-bankrupt-7496.html http://www.sec.gov/investor/pubs/bankrupt.htm http://bankruptcy-law.freeadvice.com/bankruptcy-law/business_bankruptcy/paid_bankruptcy.htm http://www.investopedia.com/articles/01/120501.asp http://www.investopedia.com/articles/01/120501.asp
if a company goes bankrupt who is paid first