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Guess what, companies hemorrhaging money tend to avoid actual restructuring and just fire their lowest earners willy nilly. Ch11 gives creditors + a judge oversight
Liquidationist whiners need to delete their accounts https://twitter.com/luerverte/status/1249813264416071680">https://twitter.com/luerverte...
Liquidationist whiners need to delete their accounts https://twitter.com/luerverte/status/1249813264416071680">https://twitter.com/luerverte...
This happens *during* ch11
What do you think happens when corporate fatcats are given an open checkbook? They fire frontline workers because costs and hand out more sinecures to their friends https://twitter.com/luerverte/status/1241617300781854721">https://twitter.com/luerverte...
What do you think happens when corporate fatcats are given an open checkbook? They fire frontline workers because costs and hand out more sinecures to their friends https://twitter.com/luerverte/status/1241617300781854721">https://twitter.com/luerverte...
Seriously, delete your accounts. You& #39;ve never been restructuring bankers and don& #39;t know what the fuck you& #39;re talking about https://twitter.com/tragicbios/status/1249734976788144130">https://twitter.com/tragicbio...
both of you too https://twitter.com/TheStalwart/status/1249385882857148416">https://twitter.com/TheStalwa...
I& #39;ve seen a certain unnamed airline& #39;s execs straight up tell creditors they required $10m to stay on board after running it into the ground. Creditors told them to shove it where the sun don& #39;t shine https://twitter.com/luerverte/status/1241031095266635778">https://twitter.com/luerverte...
Mind you this was merely their retention bonuses for sticking around for the entirety of the reorg
Creditors getting equitized tend to care about recoveries. In practice this means they& #39;re, generally, more inclined to fire management and keep frontline workers that do the actual work
Also relevant https://twitter.com/luerverte/status/1249215416854925313">https://twitter.com/luerverte...
Also relevant https://twitter.com/luerverte/status/1249215416854925313">https://twitter.com/luerverte...
Setting all this aside, arguing that the solution to the principal agent problem is ensuring neither party bears any risk is an odd place to be intellectually
But maybe the people arguing for bailouts of equity holders are really themselves trying to signal something..
People really need to get the idea of management as rational actors out of their heads. Proximity to power is generally what matters, and joe sixpack driving a forklift is pretty far away from the royal court
The best way to solve it is to pay people UI that& #39;s >70% of their wages and let the companies furlough them if they have to. It& #39;s a demand/revenue problem and giving them loans for jobs is just incentivizing creative defaults
See we& #39;ve moved onto moral suasion. The people lapping this up from journos who have never been near ch11...can& #39;t wait to see them spend another decade whining about its consequences
these companies aren& #39;t even systemically important like Lehman https://twitter.com/TheStalwart/status/1249841276494786567">https://twitter.com/TheStalwa...
these companies aren& #39;t even systemically important like Lehman https://twitter.com/TheStalwart/status/1249841276494786567">https://twitter.com/TheStalwa...
The political side of this is either you bailout everyone or you bailout no one..that is unless you want to spend another 12 years wondering why populism is on the rise
Of course the bailout demogogues will paint themselves as moral crusaders while they once again save the rich
Of course the bailout demogogues will paint themselves as moral crusaders while they once again save the rich
What are critical vendors? What& #39;s the rule of necessity under ch11?
Of course, some investors seem to think musk, a very trustworthy man, would somehow keep paying vendors in an out of court process. Funding secured https://twitter.com/ArtkoCapital/status/1249940051330584576">https://twitter.com/ArtkoCapi...
Of course, some investors seem to think musk, a very trustworthy man, would somehow keep paying vendors in an out of court process. Funding secured https://twitter.com/ArtkoCapital/status/1249940051330584576">https://twitter.com/ArtkoCapi...
This is sort of like saying every lawsuit goes to court. EV erosion is real, bonus points if you know the typical range in ch11. But prepack bankruptcies do exist
An improvement would be a quicker process that retains 80% of ch11 benefits. Canada has one https://twitter.com/Post_Market/status/1249707089741721600">https://twitter.com/Post_Mark...
An improvement would be a quicker process that retains 80% of ch11 benefits. Canada has one https://twitter.com/Post_Market/status/1249707089741721600">https://twitter.com/Post_Mark...
We& #39;ve watched them successfully do it for > 20 years now but outside a small circle of cur/ex professionals with x-border experience,it& #39;s rarely brought up
Difficult to get a man to understand something, when his salary depends on his not understanding it etc
Difficult to get a man to understand something, when his salary depends on his not understanding it etc
As someone with practical experience here, you& #39;re talking out of your ass. Kindly stick to healthcare https://twitter.com/zachweinberg/status/1249710423160623104">https://twitter.com/zachweinb...
