In reply to Simon Lee:
> (In reply to El Greyo) The government tried get someone to buy Northern Rock but couldn't. Therefore it is worth nothing.
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> At the present time.
At the point the government intervened, northern rock could not pay its debts as they fell due i.e. it was insolvent.
No buyer has come forward to buy the bank on an as is basis - Therefore it has a market value of zero and the NAV has been realised.
If the government wanted to play fair, it would have been able to buy the companies shares for pennies each after the banks doors had been closed to the public for a few days because the share price would have simply collapsed. Share price doesn't automatically reflect NAV, it reflects the amount a potential buyer wants to have a piece of a particular company.
The shareholders have failed to excerise proper governence of their company and the government has had to step to protect borrowers and the banking system itself.
So, the shareholders are not entitled to any significant compensation for their shares, nor do they have any moral entitlement to a cash handout.
Hopefully the government will make a killing on this deal and use the money to send some money to the farepak victims.