If I invested in a company that filed bankruptcy, willI get any of my money back?
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If I invested in a company that filed bankruptcy, willI get any of my money back?
I invested for a year, under a very simple promissory note; conditions – 15% interest every month and full amount back in a year. Got 15% every month but didn’t get the full amount on the due date. The company then filed for bankruptcy. I filled out the claim from the bankruptcy court. Thought I would never see a dime of my money but 6 months later I got a check saying it was 2.9% dividend on my invested money. I’m confused now. Will I be getting dividends now? How often? Is there a chance that I can get my money back?
Asked on January 27, 2011 under Bankruptcy Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
There is almost no chance you'll get your money back. First, realistically, you invested in a scam--there is NO legitimate investment that pays 15% interest monthly. Odds are, what you invested in was essentially a Ponzi scheme, with later investors money being partially used to pay earlier investors and the rest being siphoned off by the promoters, until the money ran out. (I am speaking as former SEC attorney.)
Second, even if it was a legitimate investment, if you were an unsecured creditor and the company went bankrupt, the you will only get back pennies on the dollar (if even that)--basically, you just back your pro rata share of anything that was left in the company. The 2.9%, or 2.9 cents on the dollar, you received after the bankruptcy may be all you get, thought it's impossible that as any assets are liquidated and sums owed this company collected, that you may get a few more small checks over time.
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