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List of forums -> Questions and answers. Help. -> bonds and bankruptcy - what's the process?

Here you can learn from the interaction between experienced businessmen and young entrepreneurs. You are welcome to place your questions related to our business simulation game and get the answers from experienced players

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Have you already seen one of your debtors default ?

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Start: 18.12.2019, 14:34

End date: Not specified

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- No, got all my money back
 
 2
- No, I never bought bonds
 
 5
- Yes
 
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Topic created : 18.12.2019, 14:34

Last time edited : 3.01.2020, 14:19
ChrisTekk
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m:
EcoTech SE
 
It's such a cool feature to include some simple "capital market" functionality like money lending via bonds, and creditworthiness ratings for companies. That's mostly why I went into it.
 
Now facing an interesting case: How exactly is the "Chapter 11" process in Virtonomics handled? One of my debtors is facing bankruptcy. How will my bonds / his liabilities be handled?
 
  current Rating "E"
  Assets: $141 442 544 001.86
  Cash:   $0.00
  Debts:  $73 000 000 000.00
 
The bonds I bought are due in December.
 
Exciting
Chris
 
UPDATE: At the end, my debtor remained for ca. 10 days in "E" with $0 Cash. At some point I found some of his assets listed for auction. Luckily, 3 days before the due date of my bonds, he returned to a positive Cash balance, and I received the full sum of debt back. Gift
 

PS: Of course, speaking on "bonds" is a bit misleading. Because compared to a common "loan", their distinctive feature is missing: the possibility to TRADE them on a secondary market.   

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18.12.2019, 14:54
TyStuFF
Five years with Virtonomics
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First a company will be in a pre-bankruptcy period. After 10 days the company will be considered bankrupt and enterprises will be put for sale.
 
Whenever enterprises are sold the bankruptcy period will end, and any debts will be repaid.
 
In case the company is in bankruptcy I would recommend you to buy enterprises from that particular company, at the moment that the bonds need to be repaid. Then you have the highest change you'll get as much cash back as possible. Plus you might get a good bargain on warehouses filled with goodies. 
 

19.12.2019, 13:09
ChrisTekk
Лидер розничной торговли Сенегала Egypt retail leader Belgium Retail Leader Italy retail leader Shock-worker of Virtonomics Kindergarten's Leader Power Plants Leader Double corporate chevron
Science: master Agriculture: bachelor The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, II-III places
The tender collider, II-III places World Cuisines, VII-XV places World Cuisines, IV-Vi places World Cuisines, IV-Vi places World Cuisines, IV-Vi places World Cuisines, II-III places World Cuisines, II-III places Shagreen, VII-XV places
Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places
Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, II-III places Shagreen, II-III places Shagreen, the winner Platinum sponsor of the Contest for Tycoons Sponsor of the Contest for Tycoons Greece retail leader
Brunei retail leader Venesuella best retail Tenderman Winner of the Leaders Contest in the nomination Week of perfect Service Freezer Washer Restaurateur Mayor
Mayor Mayor Mayor Mayor Mayor Mayor Mayor Mayor
Medicaster Top Technologist Retail Elite Fitness Tycoon Five years with Virtonomics Lithuania retail leader Latvia retail leader Winner of the Leaders Contest in the nomination The Standard of Virtonomics
Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination The Standard of Virtonomics Finland retail leader Governor Spain retail leader United Arab Emirates retail leader Saudi Arabia retail leader
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m:
EcoTech SE
 
Thanks for the hints!
So it seems my related debtor is in 'pre-bankruptcy' - as none of its units is on auction yet.
 
If I understand you correctly, the asset liquidation process may be super-simple:
+ at maturity date of the bond, cash is used to pay back (as much as cash allows)  - what about the rest?
+ at some later point debtor is declared "bankrupt", and ALL assets will be put on auction. That's when he loses control irreversibly.
+ such auctions may (or not) give back some cash to the company in bankruptcy
+ this cash is used exclusively to pay back debt
 

Question: liquidation preferences. Which creditor gets money back?
+ again this may be super-simple: at the day of "maturity" of the bond, the creditor will get as much as current cash allows - the rest of debt instantly vanishes?
 
=> perhaps this could make me reconsider my financing mix Again
br, Chris
 
PS: in any case I guess creditors should be informed proactively once debtors enter "pre-" or "final" bankruptcy. 
 

19.12.2019, 13:20
MacNab24
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m:
MacNab Inc.
 
Care to share the name of your debtor, so we can check if he has anything of interest for sale soon? Very we! 
 

19.12.2019, 15:47
MacNab24
The winner of the Industry Competition in the "Virtostandard of fuel" nomination Winner of the Industry Competition in the 'Government procurement' nomination Winner of the Leaders Contest in the nomination Week of perfect Service Four years with Virtonomics The winner in the nomination Your Way to success of the Industry Competition The winner of the Standard of Virtonomics nomination of the Industry Competition The best player of the qualification for the quarterly Industry Competition Winner of the Leaders Contest in the nomination Tender mania
Winner of the Leaders Contest in the nomination The Standard of Virtonomics
m:
MacNab Inc.
 
ChrisTekk
sry I can't disclose - I strive treat my business partners with trust and confidentiality.

ok I understand. But maybe once the company has gone bankrupt, you could signal it to us. The more buyers for its businesses, the bigger the chance of you recovering your losses. 
 

22.12.2019, 02:44
TyStuFF
Five years with Virtonomics
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Sinterklaas Sinterklaas Sinterklaas Ded Moroz Ded Moroz Ded Moroz Tovlis babua Tovlis babua
Tovlis babua For contribution to the development of Virtonomics Founder of the city Santander Shagreen, VII-XV places Shagreen, IV-VI, places Founder of the city Rhodes Winner of the Industry Competition in the 'Government procurement' nomination Winner of the Contest for Managers in the nomination Nation's Health
Five years with Virtonomics The winner of the Industry Competition The winner of the Storm of regions nomination of the Industry Competition Winner of the Leaders Contest in the nomination Tender mania Winner of the Leaders Contest in the nomination The Standard of Virtonomics Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination The Standard of Virtonomics
 
Actually all regular enterprises will go on the enterprise market first. Point properties will be put on auction later, if the regular enterprises don't bring enough money.
 
Me personally had some bankruptcy situations, didn't lose any point properties, but did lose hundreds of bilions in warehouses and factories. Being away for 2 years has some consequences lol. 
 

22.12.2019, 15:47
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Paid units are never put up for sale in bankruptcy 
 

22.12.2019, 16:18
TyStuFF
Five years with Virtonomics
Jewelry Loupe Waffle iron Santa Claus Santa Claus Santa Claus Père Noël Père Noël Père Noël
Père Noël Père Noël Joulupukki Joulupukki Joulupukki Olentzero Olentzero Olentzero
Weihnachtsmann Weihnachtsmann Weihnachtsmann Weihnachtsmann Julebukk Julebukk Julebukk Julebukk
Sinterklaas Sinterklaas Sinterklaas Ded Moroz Ded Moroz Ded Moroz Tovlis babua Tovlis babua
Tovlis babua For contribution to the development of Virtonomics Founder of the city Santander Shagreen, VII-XV places Shagreen, IV-VI, places Founder of the city Rhodes Winner of the Industry Competition in the 'Government procurement' nomination Winner of the Contest for Managers in the nomination Nation's Health
Five years with Virtonomics The winner of the Industry Competition The winner of the Storm of regions nomination of the Industry Competition Winner of the Leaders Contest in the nomination Tender mania Winner of the Leaders Contest in the nomination The Standard of Virtonomics Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination The Standard of Virtonomics
 
You're right, the company will be liquidated completely after 30 days bankruptcy.
 
So the conclusion: Regular enterprises will be put for sale st 70% of the assets value when the company ends up in bankruptcy. 
 

List of forums -> Questions and answers. Help.-> bonds and bankruptcy - what's the process?

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