Sony's chances of going bankrupt in the next two years

[Dodece]

@Train Wreck

I think you have a somewhat skewed view of what structured bankruptcies such as chapter eleven entail. They aren't any kind of get out of jail free card. They don't remove a companies debts. They just transfer ownership from the current owners in this case the stock holders to the creditors. Basically the company is just becoming the collateral to pay the debt. Granted this is just a expedited explanation, and there are nuances. Depending on the specific laws in question. In all likelihood since Sony is based in Japan. It would be resolved under Japanese law.

That all said the creditors still have rights. They can petition for liquidation, or veto a restructuring plan. In the end it really depends on whether they think continued operation of the business will not damage their bottom line further, and it stands a good chance of generating them a profit. In the case of Sony seeing as the company had large cash reserves at the beginning of its slide, and would have exhausted them by the time of the filing. Chances are the creditors would be far from likely to approve a restructuring.

Sony wouldn't be much of a valid operating concern at that point in time. Continued operations would actually carry significant risks. No amount of restructuring adequately addresses the real problem, and that is Sony's catalog of products would actually be uncompetitive in their market place. There are good arguments for restructuring bankruptcies, but give the nature of Sony's business model. No such good arguments seem to apply. We aren't talking about a bank who's assets may be undervalued, but will undoubtedly improve in a economic recovery, or a business that had a short fall, because of a unexpected rise in the price of energy.