I have stock in American Home Mortgage and it declared bankruptcy. Can I recover anything?
Investing
HereAndThere asked:
I am still holding shares of American Home Mortgage which declared bankruptcy several weeks ago. The share price has plummeted and is almost worthless at this point. Do I continue to hold this position? Do I sell these shares that are worth just a few bucks? Will I recover anything as part of a class-action suit, etc.? I’m ready to just write this off as an almost total loss but I’d like to find out if I’m entitled to anything.
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I am still holding shares of American Home Mortgage which declared bankruptcy several weeks ago. The share price has plummeted and is almost worthless at this point. Do I continue to hold this position? Do I sell these shares that are worth just a few bucks? Will I recover anything as part of a class-action suit, etc.? I’m ready to just write this off as an almost total loss but I’d like to find out if I’m entitled to anything.
Caffeinated Content
November 15th, 2008 at 2:21 am
when you gamble in Reno or Las Vegas, and you lose all your money, do you expect to recover any of it?…the stock market is a gamble,,nothing more, nothing less,,,sometimes you win,,sometimes you lose,,you got to know when to hold em, know when to fold em…
November 15th, 2008 at 2:33 am
No, if you own common stock-you have a residual claim on the equity of the company AFTER debt holders are settled and preferred shares are settled. Write it off, you will never collect anything.
November 15th, 2008 at 11:41 pm
You will mostly recover nothing. I would sell but you might not be able to. You could hold onto it to see if the company can bounce back from bankruptcy. I don’t know the details.
Your best bet is to call your broker.
November 17th, 2008 at 6:23 am
You’re out of luck.
However, you may be able to show a loss on your income tax return. Suppose you paid $ 20.00 a share, and now the stock is worthless. You have a loss of 20.00 per share.
Better check with someone up to date on sales and exchanges of property, though.
Small consolation, but at least some consolation.
November 17th, 2008 at 8:33 pm
I owned some stock in another company that went bust.
When they came out of bankruptcy, the old shares were worthless. They issued new stock to the new investors.
It may only be pennies on the dollar, but if you can get it, do it. As with any investment loss, if you are in the USA, your losses are deductable on your taxes and can help to offset your gains.
November 18th, 2008 at 6:07 am
Before you sell and declare a loss in this financial year you should review (with an advisor) whether it is best to do that this financial year or next. I don’t know your circumstances but ften they shift year to year and there may be an advantage to waiting a bit longer. Similarly if you can write them off under a spouse’s taxes this can have a bigger impact sometimes.
As long as the shares have value though there is a chance of the phoenix rising from the ashes.
November 21st, 2008 at 8:54 am
What will happen will most likely be like trader’s experience. It would probably be a good idea to sell if you can now. You can write off the loss on your income taxes, up to 3000 dollars per year, until its all been written off. You will benefit by the amount of your tax rate, so it would be a good idea to sell now.