Stock holders rights etc.

[terrym127]

the company most likely corporated in delaware a fiberoptic company called metro media fiber networks (mfnx). invested a large amount in company based on analists views for future growth. there is now talk of bankruptcy. what will happen to stock holders equity/investment if they file chapt.11 or 13? and should i sell now take the loss and hope to get some recovery in taxes next year?

thanks,
Michael

 

[ALawyer]

If you have shares you have to sell them to recognize the loss -- but of course they may go up or down to zero.

If you bought LESS than a year ago, then selling now would be a SHORT TERM loss and these are generrally more valuable than long term losses.

As for the company, if there was fraud in the sale you'd have cause for a lawsuit, or if the brokerage firm inappropriately recommended it there is a basis for an arbitration proceeding. But if the company simply crashed and burned, that a downside to investing.