Worldcom
HelpRegister |
Worldcom Our club owned the Worldcom stock that emerged from bankrupcy. Ourr inquiry with MCI resulted with thie reply I copy below "According to the company's plan of reorganization, which was confirmed and made public on October 31, 2003, and in accordance with the guidelines of the U.S. Bankruptcy Code, equity ownership in the company transferred to the company's creditors upon its emergence from Chapter 11 protection as payment of debt. 100% of the stock in the reorganized company was issued to the creditors. The creditors became the shareholders making the existing WorldCom group stock (WCOEQ) and MCI group stock (MCWEQ) worthless. When the company emerged from Chapter 11 at the end of April, those shares ceased trading and were cancelled. The United States Bankruptcy Code governs payoffs of pre-petition claims and pre-petition equity interests. The Code prescribes a priority schedule under which various claims are paid in a specific order with equity (stock) interests at the lowest level. Shareholders have an equity interest or ownership in the company, whereas a creditor has a debt claim against the company. As a result, shareholders cannot receive any distribution on their equity interests unless all other creditors are paid in full or unless the majority of the company's creditors agree to allow some recovery to shareholders. Based on bankruptcy laws and $41 billion in total liabilities, the creditors are not getting full recovery so there is no recovery for shareholders. There is a section on the SEC's website regarding corporate bankruptcy that explains why stock in bankruptcy is not likely to have any value. http://www.sec.gov/investor/pubs/bankrupt.htm If you purchased your shares prior to June 25, 2002, I encourage you to contact the SEC at 1-800-732-0330 about a potential settlement. On your tax question, I would encourage you to speak with an accountant to get an appropriate answer. " Our question is , in order to capture our loss on this stock do we have to sell it now, or can we write it off as worhless. If so how do we do this in Bivio accounting? Steve Hannemann |
|