Posted by: aleajactaest Date: Saturday, August 23, 2008 4:24:57 PM
In reply to: player1234 who wrote msg# 170156 Post # of 170179
1. Wave currently has negative "Net Worth" (Stockholder's Equity); i.e. they owe more than they have.
2. They owe Creditors for goods and services, they've used but haven't paid for such as rent and utilitities for example.
3. Certainly, Wave has a signiicant payroll w/ all the requisite payroll taxes due shortly.
4. Any Creditor can go to court and seek relief, the court can order Waves doors be locked.
5. I'm not attempting to be an alarmist, but this situation, unless remedied very quickly, could finish Wave for we, current investors.
I wonder which of these statements was beyond words and pushing reality.
1. In the latest quarter, Wave's current assets were $1.4m and their current liabilities were $5.1m: a current ratio of 1:4! Lower than 1:1 and a company is technically insolvent under the definition I learnt. And their stockholder's equity was $-3.0m. This is what the words negative net worth mean.
2. Current liabilities were $5.1m at the end of the quarter: an increase of $1.3m or 34% over the prior quarter. The increase indicates slow or non-payment of creditors.
3. Payroll is usually paid every two weeks, or monthly, and is undoubtedly Wave's most significant monthly expense.
4. "Can a creditor obtain relief from the automatic stay?
Yes, by filing a motion in the Bankruptcy Court and persuading the judge to grant relief. An order granting relief from the automatic stay permits a creditor to take certain specified actions, which will be spelled out in the order, to collect a debt against you. The relief may include permission to foreclose or repossess, to seek recovery under an insurance policy, to continue an action against you in a state court, and so on.
In a Chapter 13 case there must be cause for the creditor to take action."
bankruptcy-law.freeadvice.com
5. Certainly such a situation demands a remedy. But then, that was tkc's point.
I fail to see that there were any factual grounds to make a statement to the effect that tkc's words either pushed reality or were beyond words. Indeed, a person insinuating that they were anything but entirely true would have to make a very interesting case. |
