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Chapter 7:Bankruptcy Liquidation

by Khan Academy • 118,646 views

Introduction to bankruptcy liquidation (Chapter 7) More free lessons at:

Is "the next video" the chapter 11? not chapter 8?
i wonder if someone can take out a secured loan  using a priority debt like child support  collateral? but if there's no item like a car or a property  that has real value but a priority debt, can it even be secured? this is fascinating!!!!
We must get this information out to the general public. Everyday, we have people calling that have bad information on the process. Thank you.
so are you saying that buying bonds from a seniority liability creditor would be a better investment than equity stocks? that is what it seems like to me. Please answer. Thank you 
the first who get they're money are priority debts over secured?
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Many cool tips about Chapter 7 Bankruptcy! Thanks for sharing!
er 5mil - 1mil - 2mil = 2 the subordinated should get all their money back?
For instance, a business that made perfect sense, but due to economic downturn or poor investment decisions/management, or taking too much leverage to be able to pay it back. I interpret bankruptcy as a business shutting down. I am just a little confused why a company's restructuring/reorganization would be considered bankruptcy, if the company stays in business. Thanks.
math is wrong at the end. you actually have enough to pay the subordinate unsecured in your example.
Well layed out and thanks for going to this effort. I think it was worth mentioning that many people over value their assets as you pointed out and don't realize the danger that can present down the track.
Have you ever taken an accounting class? The dollar sign only has one line through it. $
i saw that movie on youtube! pretty deep huh? check out the article below. "Shell Consortium Wins Contract on Iraq's Majnoon Oil Field" on the wall street journal If we go into Venezuela next, then I believe that movie in its entirety.
This explained ch 7 bankruptcy very well
No, the stock/equity can only go to zero. It cannot be negative. If I own a share of GM, the worse thing that can happen is that it becomes worthless. I wouldn't ever "owe" money to GM's unsecured creditors.
Great video and info, thanks ! If you're going out of business and need to sell the overstocks, google up ' The Biggest Clearance '. Good starting point.
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what you explain in the second half of the video is that an Collateralize Debt Obligation? is bank debt traded like bonds?
@masakmerah Because it wasn't you that borrowed the money, it was the company that you have shares in. Therefore their obligations aren't yours, so you won't have to take on the company's liabilities.
Thanks for the useful video. I just want to point out one thing. In theory, what you said is true, but in reality, it is a difficulty of enforcing legal rights of lien holder and there is a problem with delays even when the legal rights were to be obtained. In practice, the people with senior debt may find it difficult to take over the promised assets if the assets have fair value in excess of their claims because junior debt holders may have interest as well as others at the bottom of the
amazing , you just made me understand something that my professor could not :) thanks
Thank you for these videos - very informative for the intelligent novice.
Many of You, in my humble but accurate opinion, would benefit from learning about how the "Federal Reserve" system and banking business work. The movie that describes it, in the most coherent way is Zeitgeist: Addendum. Its right in the beginning of the movie, so You don't need to watch the whole 2hours. It explains how "Modern Money Mechanics" work with the FED. "Money" literally is being created out of DEBT. Since 1913, US currency is not exchangeable by gold at banks for a reason. Watch it!
One doubt.. In case of bankruptcy liquidation, does the company payback the principal as well interest to the debt holder?
what does enlightenment have to do with understanding the uniform commercial code in America? debunk it? debunk what? debunk every conspiracy theory that is expressed and implied in the movie or debunk your statement that money is being created out of debt? that statement isn't even close to being articulated enough to debate.
the senior secured debt is 2M$ not 1M$ .the liability is 6m$ not 5. thus the subordinated gets 1M$.
bonds holders are basically debt investors and share holders are partial owners
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just a minor point khan, but your math towards the end of the video doesn't work out. Company is selling $5 million in Assets and ends up giving $4 million to debtors
you should make your opinions more humble because they're not entirely accurate and not at all precise. Oh and maybe, just for credibility's sake, you shouldn't cite pop-propaganda/ conspiracy theory videos to support your point.
In my opinion, the only bankruptcy type would the liquidation. And then liquidation could be divided into two, and possibly more, types: Liquidation, as you mentioned, as a result of a business that does not seem to make sense and cannot reach an expected/desired profit level and the other type would be a liquidation as a result of insolvency. see next...
Sal, if the assets were only 5 mil, and there only enough for Subordinate to get 1 mil back (instead of 2 mil)......doesnt the equity holders owes the Subordinates the difference (1 mil)? dont they have to pay?
can you do a video on wheel of fortune bankruptcy?
if you file for bankruptcy it's not the end..I am in process of recovering or my husband is..please visit my blog
Search "Chapter 7 Bankruptcy" on Krustbox (dot) com.
get a chapter 7 or divorce and more american freedom legal
Please, enlightened one. Debunk it. Words straight from the horses mouth. Read Modern Money Mechanics. Read "The Creature from Jekyll Island : A Second Look at the Federal Reserve". Case Closed. ∞Hare Krishna, Hare Krsna, Hare Krsta, Hare Christ∞
This video is pretty interesting, does that make me a nerd? We might be able to work together. I help people who have file bankruptcies get a cash settlement
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he is talking specifically about chapter 7, bankruptcy liquidation. Where, the owners just decide that they do not want to run the company anymore, for whatever reason, that is when they file for Chap 7, bankruptcy liquidation. See this video once again, you'll get your answer.
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