10/16 So, what happens to shareholders in a mutual fund if the mutual fund
company goes belly-up?
\_ I imagine they stand in line with the other Chapter 7 bankruptcy
debtors. They probably stand pretty close to the front though.
\_ That sounds mighty suspicious. -op
\_ The "mutual fund company" just manages the fund. Each fund is its
own separate entity under the Investment Act of 1930something, and
owns its assets on behalf of its shareholders, with its own
board and everything. The managers and its debtors have no legal
claim on the fund's assets.
\_ So if the mutual fund place closes shop, do they liquidate the
funds and return to shareholders, or what?
\_ yes. |