Someone school me on this
Btw I may have misunderstood this, I am hella high off some death budda right now so it dont compute.
I want to learn more about this
Didn't watch the video but here is what happens when bankruptcy happens (Chapter 7, which is dissolvement of the company)
The court appoints a trustee to guide the dissolution
Assets are sold/auctioned off, usually pennies on the dollar. Debtors of the company are pursued for the owed funds.
Then the creditors get paid off of the funds raised. Starting with
1. Employees owed money on wages/salaries
2. Any federal/state/local taxes due
3. Bond holders
4. Other creditors (banks for example)
5. If there is any money left then shareholders get the rest. Usually there isn't any money left by the time we get to this point
So I'm not sure how employees own a company that goes bankrupt.
Chapter 11 bankruptcy (reorganization of debt) is different but all that does is negotiate agreements with creditors to accept a reduced amount of money or accept different loan terms. Has nothing to do with transfer of ownership to the employees.
