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Here’s the truth about how a company’s bankruptcy can affect you

Holders of a stock can be left with important decisions to make when a company they are invested in files for bankruptcy protection.

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As the global economy continues to take new shape in its recovery from the Covid-19 pandemic, many companies are still reeling from the high costs and supply shortages the health crisis triggered.

And a significant number of them are filing for bankruptcy.

Related: Another company files for bankruptcy and Dave Ramsey has words

Major bankruptcy filings in 2023 included the working space company WeWork in November, drug store retailer Rite Aid in October, and Bed, Bath & Beyond in April.

The trend has continued in 2024. In fact, telecom company Airspan Networks Holdings  (MIMO)  filed for a prepackaged Chapter 11 bankruptcy in Delaware on March 31.

A lot of the news around bankruptcies involves how companies are restructuring their debts or going out of business entirely. But if a company that files for bankruptcy has a stock that is publicly traded, the question of what happens to shareholders is worth examining. 

In Airspan's case, existing holders of stock have been given two options. One is to receive their pro rata share of $450,000. The other is to elect for warrants instead of cash. But if more than 150 shareholders decide to take the warrants, no warrants at all will be given.

A pro rata share is the cash value of a proportionate number of owned shares based on the determined total value.

A warrant is similar to an option, where the holder can purchase a security at a specific price and quantity at a future time. But unlike options, warrants are issued by a company rather than a central exchange.

What bankruptcy means for the people affected

The thought of bankruptcy is scary for companies, their employees and shareholders.

The companies themselves would enter a reality where they are forced to ponder their very survival.

Employees, naturally, wonder about the security of their jobs.

The impact on shareholders of a company filing for bankruptcy has a few layers of complexity.

In Chapter 7 bankruptcy, a company is simply going out of business. It sells its assets to pay off debts. Shareholders are left to split what's left, if there is anything remaining at all. If there is not, shareholders can get nothing.

When a company is considering filing for Chapter 11 bankruptcy, it is likely looking to restructure and stage a comeback. If shareholders are brave enough to hold onto their shares during this process, which is risky, they at least stand the chance of making some money back.

For example, car rental company Hertz  (HTZ)  filed for Chapter 11 in May 2020 as the Covid-19 pandemic wounded the travel business generally. While the stock has struggled recently, the company did come out of bankruptcy in July 2021.

Employees are pictured pondering the bankruptcy of their company, peering out the window of a building.

Shutterstock

In bankruptcy events, shareholders are last in line

When a company goes bankrupt, hanging on to its shares is dicey business. Shareholders could wind up with little or nothing, but they may be rewarded for their patience. 

In the short term, the stock is probably already down at the filing and is destined to stay that way for a while. But in the long term, there may be hope for a revival.

Shareholders are the last ones to be considered for payouts. First to get any money from liquidated assets or cash advancements are secured creditors such as banks holding mortgage or equipment loans, for example. Unsecured creditors, including banks, suppliers and bondholders are next. Then come the shareholders.

"The stock could very well become completely worthless," writes The Balance. "But there’s always a chance that the company could emerge from bankruptcy stronger and stock prices may rise. In the short-term, however, the stock price is likely to stay very low during bankruptcy and immediately after."

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Does methylene blue or mitoquinone improve skeletal aging?

“[…] long-term administration of MB or MitoQ did not have an effect on skeletal morphology during the aging process […]” Credit: 2024 Poudel et…

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April 3, 2024

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“[…] long-term administration of MB or MitoQ did not have an effect on skeletal morphology during the aging process […]”

Credit: 2024 Poudel et al.

“[…] long-term administration of MB or MitoQ did not have an effect on skeletal morphology during the aging process […]”

BUFFALO, NY- April 3, 2024 – A new research paper was published in Aging (listed by MEDLINE/PubMed as “Aging (Albany NY)” and “Aging-US” by Web of Science) Volume 16, Issue 6, entitled, “Targeting mitochondrial dysfunction using methylene blue or mitoquinone to improve skeletal aging.”

Methylene blue (MB) is a well-established antioxidant that has been shown to improve mitochondrial function in both in vitro and in vivo settings. Mitoquinone (MitoQ) is a selective antioxidant that specifically targets mitochondria and effectively reduces the accumulation of reactive oxygen species. In this new study, researchers Sher Bahadur Poudel, Dorra Frikha-Benayed, Ryan R. Ruff, Gozde Yildirim, Manisha Dixit, Ron Korstanje, Laura Robinson, Richard A. Miller, David E. Harrison, John R. Strong, Mitchell B. Schaffler, and Shoshana Yakar from New York University College of Dentistry, City College of New York, The Jackson Laboratory, University of Michigan, South Texas Veterans Health Care System, and The University of Texas Health Science Center investigated the effect of long-term administration of MB or MitoQ on skeletal morphology during the aging process.

“[…] we administered MB to aged (18 months old) female C57BL/J6 mice, as well as to adult male and female mice with a genetically diverse background (UM-HET3). Additionally, we used MitoQ as an alternative approach to target mitochondrial oxidative stress during aging in adult female and male UM-HET3 mice.”

Although the researchers observed some beneficial effects of MB and MitoQ in vitro, the administration of these compounds in vivo did not alter the progression of age-induced bone loss. Specifically, treating 18-month-old female mice with MB for 6 or 12 months did not have an effect on age-related bone loss. Similarly, long-term treatment with MB from 7 to 22 months or with MitoQ from 4 to 22 months of age did not affect the morphology of cortical bone at the mid-diaphysis of the femur, trabecular bone at the distal-metaphysis of the femur, or trabecular bone at the lumbar vertebra-5 in UM-HET3 mice.

“Based on our findings, it appears that long-term treatment with MB or MitoQ alone, as a means to reduce skeletal oxidative stress, is insufficient to inhibit age-associated bone loss. This supports the notion that interventions solely with antioxidants may not provide adequate protection against skeletal aging.”

 

Read the full paper: DOI: https://doi.org/10.18632/aging.205147 

Corresponding Author: Shoshana Yakar

Corresponding Email: sy1007@nyu.edu 

Keywords: methylene blue, mitoquinone, bone, micro-CT, antioxidants

Click here to sign up for free Altmetric alerts about this article.

 

About Aging:

Aging publishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.

Aging is indexed by PubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed Central, Web of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).

Please visit our website at www.Aging-US.com​​ and connect with us:

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Click here to subscribe to Aging publication updates.

For media inquiries, please contact media@impactjournals.com.

 

Aging (Aging-US) Journal Office

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Orchard Park, NY 14127

Phone: 1-800-922-0957, option 1

###

Journal

Aging-US

DOI

10.18632/aging.205147

Method of Research

Experimental study

Subject of Research

People

Article Title

Targeting mitochondrial dysfunction using methylene blue or mitoquinone to improve skeletal aging

Article Publication Date

25-Mar-2024

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Struggling mall retailer could file for Chapter 11 bankruptcy

The popular brand has suffered from changing consumer tastes and shopping patterns.

Published

4 hours ago

on

April 3, 2024

By

Malls are dying. Blame Amazon.

That's a popular refrain, but it's not true.

"Shopping-mall foot traffic is nearing prepandemic levels, but not everything is the same — that’s a main takeaway from a new white paper by foot-traffic-analytics firm Placer.ai, The Comeback of the Mall in 2024.

Malls aren't a dying business model; instead, people are visiting different shopping malls.

Related: Popular brewery files Chapter 11 bankruptcy, faces liquidation

"The white paper finds that during 2023, visits at indoor malls were down 5.8% compared to 2019 — a dramatic improvement from being down more than 15% in 2021," Placer.ai reports. 

"Similarly, open-air shopping-center foot traffic was down only 1% last year compared to 2019. The white paper notes that visits for the shopping-center industry at large were down 2.3%, and foot traffic may yet pick up again in 2024.”

All this does not mean that some mall retailers have not been hurt. The covid pandemic changed people's needs, especially when it comes to clothes.

Hybrid and work-from-home models require more casual clothes and athleisure wear. In addition, mall foot traffic does not always mean people shopping in stores.

"Experiences are key in driving mall traffic," Placer.ai reported. "Adding entertainment or dining options can help bring crowds in – and keep them there. ... Malls received visit boosts following the additions of new dining and entertainment options like Texas Roadhouse and Main Event, indicating that shoppers are responsive to many kinds of retail."

In addition, the covid pandemic added to debt for many mall-based retailers, and one well-known brand appears to be headed for bankruptcy.

Express has been burning cash.

Image source: Express

Express's problems are piling up

In March, Express  (EXPR)  received a delisting notice from the New York Stock Exchange,

"The company’s common stock will now trade publicly on the OTC Pink Market under the symbol EXPR," the retailer said on its website. 

"This transition to the over-the-counter market will not affect the company’s business operations or its U.S. Securities and Exchange Commission reporting obligations, and it does not conflict with or cause an event of default under any of the company’s material debt or other agreements."

In its third-quarter-earnings report, the company reported a $28.7 million operating loss, narrower than the $29.5 million operating loss in the year-earlier period. Express's net loss was a little wider: $36.8 million, or $9.83 a share, against a net loss of $34.4 million, or $10.09 a share, a year earlier. (Almost 10% more shares were outstanding in the current period.)

At the close of the quarter, the retailer had cash and cash equivalents of $34.6 million and $274 million in debt. That was a $40 million increase in debt over a year.

Express exploring Chapter 11 bankruptcy

Express has been talking to lenders about raising the cash it would need for a Chapter 11 bankruptcy, according to a report from Bloomberg. The company could file for bankruptcy as soon as next week, but no final decision has been made.

Despite the company's cash position and debt, Rapid Ratings, which tracks the financial health of public companies, sees Express as being in a relatively good position.

"Express Inc. demonstrates adequate performance in leverage and earnings performance but some weakness in liquidity. Although mixed, this performance is sufficient for the company to be assigned a Low-Risk rating," the website reported.

The rating service did issue a warning.

"This period includes an abnormal item. When the rating for this period is simulated with the abnormal item excluded, the company's health is significantly worse suggesting the line item is having a meaningful effect on the rating for this period," according to the service.

Express leadership issued the expected comments on its future in the news release on being delisted by the NYSE.

“Over the past several months, we have taken decisive steps to position Express for the long term, including implementing a series of cost-saving initiatives and streamlining our process to enhance operational efficiency,” Chief Executive Stewart Glendinning said. 

“We remain focused on continuing to serve our customers and positioning our organization for the future.”

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Struggling mall retailer plans Chapter 11 bankruptcy filing

The popular brand has suffered from changing consumer tastes and shopping patterns.

Published

5 hours ago

on

April 3, 2024

By

Malls are dying. Blame Amazon.

That's a popular refrain that many people believe, but it's not actually true.

"Shopping mall foot traffic is nearing pre-pandemic levels, but not everything is the same — that’s a main takeaway from a new white paper by foot traffic analytics firm Placer.ai, The Comeback of the Mall in 2024.

Instead of malls being a dying business model, there have been some shifts in which shopping centers people visit.

Related: Popular brewery files Chapter 11 bankruptcy, faces liquidation

"The white paper finds that during 2023, visits at indoor malls were down 5.8% compared to 2019 — a dramatic improvement from being down more than 15% in 2021. Similarly, open-air shopping center foot traffic was down only 1% last year compared to 2019. The white paper notes that visits for the shopping center industry at large were down 2.3%, and foot traffic may yet pick up again in 2024”

That does not mean that some mall retailers have not been hurt. The covid pandemic changed people's needs, especially when it comes to clothes.

Hybrid or work-from-home models require more casual clothes and athleisure wear. In addition, mall foot traffic does not always mean people shopping in stores.

"Experiences are key in driving mall traffic. Adding entertainment or dining options can help bring crowds in – and keep them there...Malls received visit boosts following the additions of new dining and entertainment options like Texas Roadhouse and Main Event, indicating that shoppers are responsive to many kinds of retail," Placer.ai reported.

In addition, the covid pandemic did add to debt for many mall-based retailers and one well-known brand appears to be headed for bankruptcy.

Express has been burning cash.

Image source: Express

Express's problems are piling up

In March, Express EXPR received a delisting notice from the New York Stock Exchange,

"The company’s common stock will now trade publicly on the OTC Pink Market under the symbol 'EXPR.' This transition to the over-the-counter market will not affect the company’s business operations or its U.S. Securities and Exchange Commission reporting obligations, and it does not conflict with or cause an event of default under any of the company’s material debt or other agreements," the retailer shared on its website.

In its third-quarter earnings report, the company reported a $28.7 million operating loss, That was slightly down from the $29.5 million it lost in the same period last year. Express's net loss was a little bigger. The company reported a net loss of $36.8 million, or $9.83 per diluted share, compared to net loss of $34.4 million, or $10.09 per
diluted share, in the third quarter of 2022

At the close of the quarter, the retailer had cash and cash equivalents of $34.6 million and $274 million in debt. That was a $40 million increase in debt over a year.

Express exploring Chapter 11 bankruptcy

Express has been talking to lenders about raising the cash it would need for a Chapter 11 bankruptcy, according to a report from Bloomberg. The company could file for bankruptcy as soon as next week, but no final decision has been made.

Despite the company's cash position and debt, Rapid Ratings, which tracks the financial health of public companies, sees it as being in a relatively good position.

"Express Inc. demonstrates adequate performance in leverage and earnings performance but some weakness in liquidity. Although mixed, this performance is sufficient for the company to be assigned a Low-Risk rating," the website reported.

The rating service did issue a small warning.

"This period includes an abnormal item. When the rating for this period is simulated with the abnormal item excluded, the company's health is significantly worse suggesting the line item is having a meaningful effect on the rating for this period," according to the service.

Express leadership did issue the expected comments on its future in the press release on being delisted by the NYSE.

“Over the past several months, we have taken decisive steps to position Express for the long term, including implementing a series of cost-saving initiatives and streamlining our process to enhance operational efficiency,” said CEO Stewart Glendinning. “We remain focused on continuing to serve our customers and positioning our organization for the future.”

Read More

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