NorthPoint Communications Holdings, Inc. (NPNT) Message Board

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Technology Stocks : NorthPoint Communications Holdings, Inc. (NPNT)

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To: lnkennedy who wrote (764)	1/29/2001 9:28:12 PM
From: GraceZ	Read Replies (1) of 786

You missed my point. There are debt holders and creditors, and there are assets. The creditors are owed more than the assets that the company has in possession. The debt holders always get first dibs on the assets. You minus what is owed to the debt holders and creditors and there are less than zero assets. Therefore, even if there was criminal intent on the part of the officers of the company to cook the books, the equity holders get nothing. No lawyers will initiate a class action suit on behalf of the shareholders against a company where they have to get in line to get paid behind debt holders who will get all of the assets. To a certain extent the bankruptcy court looks after the shareholders.....but equity holders are ALWAYS last in line. This is the biggest difference between holding debt obligations and an equity position. You own equity you are an owner of the company and all it's assets. If they can satisfy the bond holders and debt holders and there is something left over.....that is what you get. Or if they emerge as a going concern, than you still have your stock. More often than not they will exchange your shares for warrents in a new entity.

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