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Politics : Formerly About Advanced Micro Devices
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To: RetiredNow who wrote (218774)2/11/2005 10:37:27 AM
From: zonder  Read Replies (3) of 1574267
 
I post the dictionary's definition of bankruptcy.
Bankruptcy = when liabilities exceed market value of assets

I will say this only once. Hearing the message is up to you.

This is the real definition of bankruptcy:

"A state of insolvency of an individual or an organization — in other words, an inability to pay debts."
datek.smartmoney.com/glossary/index.cfm

"inability to discharge all your debts as they come due"
www.cogsci.princeton.edu/cgi-bin/webwn

"A condition in which a business cannot meet its debt obligations and petitions a federal district court for either reorganization of its debts or liquidation of its assets."
www.4hb.com/25b.html

"Bankruptcy is a legal declaration of the inability to repay debts."
1-debt-consolidation-loans-and-services.org/glossary.html

"The financial inability to pay one's debts when due."
mortapps.iucu.org

In other words, it is not the level of assets vs level of liabilities, but your inability to PAY interest and capital on your debt that is the deciding factor in whether or not you can be considered bankrupt. There are quite a few companies with long term loans that exceed their assets at some point in time but are NOT bankrupt because they have no problems paying the interest on their debts. As long as they have cash flow that meets their operational expenses and financial obligations (i.e. debt payments), the company can slowly build its assets and decrease its liabilities through debt repayments or even simple operations like reducing non-debt liabilities such as accounts payable, all of which of course has little to do with its ability to meet financial payments on its debts.

This is no subtle mystery. Spend two minutes on Google searching for define: bankruptcy and you will see all this. Insisting on some "definition" you say you saw somewhere is pointless, in my humble opinion.
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