Bankruptcy or Receivership
A bankruptcy case or a receivership has started for the company or one of its main subsidiaries: the company itself reports it on Form 8-K Item 1.03.
Field guide
What the filings mean, and what they do not
Plain-English notes on each kind of entry on the wire, with links to the official explanations. Not legal, credit or investment advice: for a decision that matters, read the record and ask a professional.
The four kinds of entry
Costs Associated with Exit or Disposal Activities
The company reported a restructuring: it committed to exit or dispose of part of its business (for example closing some sites, ending a product line or cutting staff) and expects material costs, under Form 8-K Item 2.05. It does not mean the company is closing; healthy, profitable companies file it too, often alongside an earnings release.
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
An exchange told the company it does not meet a continued-listing rule, or the company is delisting or moving its listing: Form 8-K Item 3.01. Many of these are compliance notices with time to fix, not closures.
Bank failure
A bank was closed by its chartering authority and the FDIC was named receiver. Insured deposits are covered by the FDIC up to the legal limit; the FDIC publishes what happened to each bank.
A public company generally has four business days after the event to file a Form 8-K. The SEC's own description of each item is in the Form 8-K instructions; Investor.gov has a short explanation of Form 8-K.
Chapter 7, Chapter 11 and receivership
Chapter 7
A liquidation: a trustee collects and sells the debtor's non-exempt assets and pays creditors in the order the Bankruptcy Code sets. A business in Chapter 7 usually stops operating. U.S. Courts: Chapter 7 basics.
Chapter 11
A reorganization: the business usually keeps operating as "debtor in possession" while it proposes a plan to pay creditors over time, sell itself, or sell its assets. Many Chapter 11 companies keep trading. U.S. Courts: Chapter 11 basics.
Receivership
A court (or, for banks and insurers, a regulator) appoints a receiver to take control of the business or its property. Receiverships are not bankruptcy cases; the rules depend on the court and the law that applies.
The automatic stay
When a bankruptcy case is filed, most collection actions against the debtor must stop at once. Calls, letters, lawsuits and repossessions aimed at the debtor are generally on hold unless the court allows them.
If a company that files owes you money
- Find the case. The 8-K names the court and usually the case number. Case papers are on PACER (fees may apply), and large cases often have a free claims-agent website named in the filing.
- Stop collecting from the debtor. The automatic stay applies; talk to a professional before you act on a past-due account.
- Watch for the claims deadline. Creditors usually file a proof of claim, Official Form 410, by a deadline (the "bar date") the court sets. In some Chapter 7 cases creditors are told not to file until assets are found.
- Keep your records together. Invoices, contracts, delivery records and statements support a claim.
- Get advice for anything large. This site cannot tell you what your claim is worth or what to do.
Customers, workers and depositors
Workers
A restructuring (Item 2.05) often means layoffs or closed sites. Employers covered by the federal WARN Act generally owe 60 days' notice of a plant closing or mass layoff; some states add rules. U.S. Department of Labor: WARN.
Depositors
Deposits at an FDIC-insured bank are insured up to $250,000 per depositor, per insured bank, for each account ownership category. When a bank fails the FDIC publishes what happens to its accounts. FDIC failed bank list · FDIC deposit insurance.
Customers with orders or gift cards
What happens to deposits, orders and gift cards in a bankruptcy depends on the case. The company's notices and the court's orders say what will be honored.
Shareholders
A listing notice (Item 3.01) usually gives the company time to fix the problem. In a bankruptcy, shareholders are paid after creditors and often receive nothing. This is not investment advice.
What the wire can miss
The wire lists only companies that file with the SEC (mostly public companies) and banks the FDIC insures. Most small businesses that close never file anything with either, and most bankruptcy cases are not reported on Form 8-K. Entries are found through EDGAR's full-text search and are dropped unless the filing's own item list includes Item 1.03, 2.05 or 3.01, so a filing EDGAR has not indexed yet appears on a later check. See Sources and limits.
Closing or clearing stock? List lots on the Liquidation Market from $1.95/month (free during preview). Market sellers are independent: a listing may not claim its goods come from a company on this wire, and lots never appear on filing or company pages.