What happens when a stock is delisted

When I say Large Cap I mean that in Canadian terms.
Ticker symbol for those who care is CGS.TO or CGS-T (Canwest Global). I own
this stock in a Tax-Free Savings Account (TFSA) so I cannot claim losses
against my income on an income tax return. It is a very small portion of my
stock holdings and is the only "risky" stock I have ever purchased.
This stock was delisted from the TSX (By the stock exchange board) Oct. 6
because the company has filed for creditor/bankruptcy protection. The
bondholders are trying to force a sale of assets and the company is offering
bondholders shares in return, like what GM did.
What happens in cases like this? What happens to my current shares? Since
I cannot sell them at this time is it likely my shares go up in smoke? The
scenario as I see it is a new company will be reformed after an assest sale
but will my shares transfer tot he new firm? If the company is insolvent
after protection runs out then what? Maybe the company privitizes during
protection, what happens to shares then?
Can anyone present me with some scenarios they have been presented with in
this sort of situation?
Thanks for the convo!!!
Reply to
The Henchman
If you are a stockholder in a bankrupt company, you usually won't get anything for your shares. My stock broker has bought my shares when that occurred for $1, allowing me to get the stock off the books and take a loss when in a taxable account.
-- Ron
Reply to
Ron Peterson
Shares may be sellable in the OTC market (in the US). But probably not for very much, and it could take weeks to find a buyer.
General Motors and Lehman are an example. There is still some speculative play in their old shares, keeping them at a non-zero value. Its extemely unlikely that there would be any dividend leftover for shareholders after liquidation and creditor payoff.
Reply to
-- Delisted stocks are often traded on the "pink sheets" after being delisted. Type in "pink sheets" on Google for an explanation of how that market works. some brokers may not deal in pink sheet stocks.
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