Quote
Investors are people who buy equity in a company.
Creditors are people who loan money or goods to a company and thus create liabilities for the company.
Creditors expect and have a legal right to be paid what they loan, including interest.
Investors have no guarantee they will ever see their money again.
When a company is liquidated, creditors have priority over investors in sharing in the proceeds.
Creditors are people who loan money or goods to a company and thus create liabilities for the company.
Creditors expect and have a legal right to be paid what they loan, including interest.
Investors have no guarantee they will ever see their money again.
When a company is liquidated, creditors have priority over investors in sharing in the proceeds.
Just in case anyone was wondering
Also I believe that the N&B shares were not equity (a piece of the company, possibly worth something if it is liquidated) but profit-only "shares" (thus worth zero if the company is liquidated), correct? Or I am mixing up with some other failed business?
If that is correct, I suppose that any assets remaining from the liquidation, after paying the real creditors, will go to the company owner -- namely, Mr. Brewster.
