Bankruptcy Risk
The risk that a company will be unable to meet its debt obligations. Often referred to as "default" or "insolvency risk".
Investopedia Commentary
This is a risk that both equity- and bondholders take when deciding to invest in a company. Aside from looking at overall profitability, analyzing a company's debt obligations and ability to repay, agencies like Moody's and Standard & Poor's attempt to determine this risk by giving bond ratings.
Related Links
An Overview Of Corporate Bankruptcy
Corporate Bonds: An Introduction To Credit Risk
What Is A Corporate Credit Rating?
Z Marks The End
See also: Absolute Priority, Bankruptcy, Chapter 11, Chapter 7, Debt Overhang, Default, Prepackaged Bankruptcy, Ratings Service