Bankruptcy Knoxville

It would be great to know when a company is about to fail so you could be sure to avoid its stock like the plague. Unfortunately hindsight is the only 20/20 vision when it comes to the market. But this article gives a very persuasive argument about identifying large market leaders who are in trouble. The author references an investor named Porter Stansberry. In the author’s words:

“Before I present Porter’s case, first consider Porter’s track record for unearthing these bankruptcies. For three years, Porter told his readers over and over again that General Motors was bankrupt. He thumped the table a hundred times about it. Then he gave the same warnings about Fannie Mae, Freddie Mac, and the Wall Street banks months before they folded.”

It seems Porter has a pretty good idea of all this. The article also identifies Porter’s next predicted failure. It doesn’t name the company, but it gives lots of clues.

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As was widely reported previously, CIT Group has filed under Chapter 11 bankruptcy. It’s of interest to the U.S. economy because hundreds of thousands of small businesses all across the nation rely on this company for financing. A quick and effective resolution to the bankruptcy is in the best interest of everyone involved. Luckily that appears to be happening:

“CIT said holders of 83 percent of its debt took part in the approval process for its reorganization plan, and holders of 92 percent of outstanding principal supported the plan.

U.S. Bankruptcy Judge Allan Gropper is scheduled at a December 8 hearing to consider whether to approve the plan, which calls for unsecured debtholders to receive 70 cents on the dollar of new notes plus new common stock.

CIT said some noteholders who did not vote for the plan will have until December 4 to accept notes and stock in exchange for their holdings, on the same terms as other noteholders who voted in favor of its Chapter 11 plan.

On Monday, CIT posted a $1.07 billion third-quarter loss, in part because the company more than tripled the amount it set aside for credit losses from a year earlier.”

Source: http://www.reuters.com/article/ousivMolt/idUSTRE5AI3N020091119