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Gold/Mining/Energy : Solv Ex (SOLVD)

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To: Gary L Schultz who wrote (5920)	8/7/1998 7:40:00 PM
From: WTMHouston	Read Replies (1) of 6735

Gary: I don't think that liabilities have to exceed assets in order for a company to file a Chapter 11 reorganization. It is my understanding that it is only the ability to currently pay the debts. (The one that comes to mind is Continental). While I would bet that most Chapter 11 filings are in situations where liabilities exceed assets, I don't think that it is a statutory requirement. I bet you are thinking about Chapter 7 liquidation. I think that Solv would have had a difficult if not impossible time keeping this as a Chapter 11 rather than a 7 unless they had sold the assets to pay the creditors since Chapter 11 requires a plan to pay off at least some portion of the debt from ongoing revenue and continue in business. Since Solv was essentially out of cash and had no income source they could not have had a plan for paying the debts (or some portion) out of ongoing revenue. Troy PS - As I have said before, my knowledge of bankruptcy is VERY limited, so I will not represent that my understanding is completely accurate.

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