Bob (or anyone knowledgeable),
I'm trying to get a rough idea how bankruptcy accounting would work. Would it be something like this?
WCOM files BK, with 100B on paper. It writes down a chunk of it as goodwill, say 55B, and has 45B left (all hypothetical numbers, of course, just for the sake of the example).
From the 45B it has to deduct the 4B expensing, the 2.5B DIP, 30B bond debt, and say another 2.5B in litigation. Let's be generous and throw in another 3B for paying who knows what for twiddling their thumbs. That would leave 3B tangible for a debt-free company.
Does the company then take some portion of this (say 1B) and distribute it to its shareholders, and keep some amount (say 2B) for its operating coffers?
Is this how it works? With the hypothetical numbers given above, it would seem that each (of 3B shares) would be worth about 0.33 cents.
Am I arguing correctly? Or are there other things going on that I have completely missed?
Thanks,
Joseph |
