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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Jonathan S. Feingold who wrote (215)	11/23/1998 1:13:00 PM
From: LK2	Read Replies (1) \| Respond to of 1989

RE-price/value of SYQT shares. SYQT filed for chapter 11 bankruptcy, which is different from chapter 7 bankruptcy. Chapter 7 is liquidation, where the company is going out of business. The shareholders, in this case, get whatever is left after paying all creditors, etc. Many times the common shareholders are wiped out completely. Chapter 11, which SYQT is using, means the company is still in business. What happens to the shares depends on the plan that is approved in the bankruptcy hearing. Sometimes the common shareholders are wiped out completely. Sometimes the common shareholders get to keep their shares, or get new shares, but there is massive dilution. You can wait to find out what happens, what plans have been filed, for the company assets. But otherwise, trading will often resume in the halted shares, before the bankruptcy proceedings are finished. Will you be able to get any money for your shares, or will you be wiped out completely? It depends on what the company/creditors decide to do with the common shareholders, dilute them, wipe them out, whatever. The simplest thing would be to use this transaction as a tax loss on your 1998 income tax return. Claim the shares as worthless, and use the deduction to reduce the taxes you owe. I am not a financial advisor, or tax advisor, so you need to check with your tax man to be certain. But I believe you can use the amount you paid for your SYQT as a loss by writing "worthless shares" on your tax return, because the shares have been halted for trading, and there is no currently available quote. On a practical basis, it could easily turn out that, unless you are using a discount broker, it could cost you more to sell the shares than you will get for the shares. That's why the "worthless shares" option is nice, you don't have to pay a broker to establish the loss. Regards, Larry