08-05-21
Bankruptcies are Rising - How is That Impacting Equity Holders?
Bankruptcy can be a wild ride for common equity holders. Corporate bankruptcies rose to a 10-year high in 2020. Many retailers, including JCPenney, 24 Hour Fitness, Lord & Taylor, Payless, and hundreds of other companies partially or permanently closed their doors. What happens to stockholders when this occurs? This article illustrates how difficult it is for equity holders to obtain a recovery in bankruptcy, and what a recovery looks like in those rare instances.