If Neteller declares bankruptcy ...

[Rigel]

first of all, anyone doubting that bankruptcy is a very real possibility if not likelihood for Neteller is in denial. They were very heavily reliant upon US gamblers for their income, and European services like Click2pay look to be in a much better position to serve European customers. Their stock has gone in the tank. I wouldn't be surprised if some law firm is preparing the bankruptcy filing right now.

Having said that ...

The good news, however, is that I really don't think the money we have with Neteller would be considered the kind of unsecured debt that typically gets paid pennies on the dollar in bankruptcy. IT'S OUR MONEY. They are nothing more than a delivery service. Having to fight other Neteller creditors for their assets would be like FedEx declaring bankrputcy and then people who sent packages which are being stored in their warehouse having to fight FedEx creditors for their assets.

Now, the wild card in all this is that I have no idea which bankruptcy law would apply to Neteller- being a non-US corporation. But I'm reasoanbly confident that, even if it does file bankruptcy, those with money there will have first priority for it.

[Zele]

Their stock hasn't traded since the arrests.

[Homer]

I don't understand the rules regarding bankruptcy, but it doesn't make sense to me that they'd be able to declare it. From what I've read, they have 110% of player's balances plus another $150 million.

[joeker]

I dont see why Neteller would have to decalre bankruptcy, all they need to do is downsize and continue serving non-US members

[smartalecc5]

Stop panicking, they're not going to

[Rigel]

[ QUOTE ]
I don't understand the rules regarding bankruptcy, but it doesn't make sense to me that they'd be able to declare it. From what I've read, they have 110% of player's balances plus another $150 million.

[/ QUOTE ]

Under US law at least, anybody can go down to the courthouse and declare bankruptcy. Of course, the bankruptcy judge can deny a chapter 7 discharge or refuse to approve a chapter 11 reorganization plan, but people with creditors breathing down their neck often do it to buy time because an automatic stay against creditors is issued.

As far as Neteller having sufficient assets to avoid declaring, maybe they do, but this is a catastrophic event and I expect they have some long range contractual obligations that didn't take these developments into account. If US law applied a Chapter 11 filing would be very useful for allowing them to reject the executory contracts and reorganize as a leaner and meaner small corporation. Bankruptcy is very useful in giving a corporation the right to reject such contracts- you otherwise don't have that right.

Once again, though- I don't even know that US law applies to Neteller.

[Rigel]

[ QUOTE ]
I dont see why Neteller would have to decalre bankruptcy, all they need to do is downsize and continue serving non-US members

[/ QUOTE ]

They would do it to gain the advantages that bankruptcy law gives them. Why do you think airlines are always declaring bankrupcy while continuing to fly? Because bankruptcy law lets them (with approval of the judge) get out of a lot of the contracts they signed with creditors and with unions.

Bankruptcy can be very attractive to companies in dire situations like Neteller is in. I'm sure they do want to become a smaller company serving Europe, etc but I'd be willing to bet they have signed a lot of contracts with various entities that envision them being a large corporation with a huge cash flow.

[gone.flying]

I suspect NT is plenty solvent and then some, even with all of it's US liabilities, so imnsho it's not going to happen in the short term - the fact that the stock hasn't traded is totally immaterial, the stock is initially suspended at NT's 'request' - fwiw our bankruptcy laws in the uk are very different from those in the US - Creditors are always able to petition the High Court for a compuslory winding up order if a legitimate debt remains unsatisfied - obviously the debt then gets paid pronto, or the company gets wound up/placed in administration. Petitioning the court is not an expensive process - might be worth seeking advice if you have significant sums on NT that you can't get by any other means

[TomR]

[ QUOTE ]
first of all, anyone doubting that bankruptcy is a very real possibility if not likelihood for Neteller is in denial.

[/ QUOTE ]

You obviously haven't read their financial statements.

[millerlolife]

From Section 3.1 of Neteller's Terms of Use:

You acknowledge that (i) NETELLER is not a bank; (ii) Accounts are not insured by any government agency; (iii) NETELLER does not act as a trustee, fiduciary or escrow holder in respect of balances in your Account; and (iv) NETELLER does not pay you interest on any balances in your Account.

There is a very real chance of never seeing any of these funds again. I was fortunate enough to transfer all of my money out and I recommend others do the same while peer to peer is still available.