Twitter bankruptcy: a bug or a feature?

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Bankruptcy in Shiny-land is not failure. It’s a business strategy to pocket all the loot, and stiff creditors. Ask any PE operator.

Steve.

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I am waiting for the lawyers who know the bankruptcy decisions to weight in. Will Twit’s debt load be relieved if Twit goes bankrupt?

Clearing out the trash is hard work, just ask Hercules.

The Captain

If he goes bankrupt this soon after taking those loans to take over, the amount of law suits will be off the charts.

I wonder what the “decent interval” between buying a company, and dumping it into BK to stiff all the other stakeholders, is. The second PE group to buy the former Art Van Furniture stores opened Sept 2, 2020, and filed for BK Jan 7, 2021, leaving scores of vendors and customers rogered.

Steve

Twitter does need income from advertising to pay down its debt. If advertisers boycot Twitter, bk could happen.

Those who decided to make those loans should have been well aware of that risk. Sure they can claim they were misled, but winning will be a challenge. These are pros who are supposed to know the business.

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I’m pretty sure that Elon’s buddies said “Sure, you’re the boy genius, how much do you want?”

I’m equally sure the banks said “Sure, we want to keep doing business with the boy genius, how much do you want?”

And that was likely the extent of the “due diligence.”

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I give the bankers slightly more smarts. I would guess the money they loaned was secured by something of value - almost certainly his Tesla stock. Whether that collateral is adequate is a different question. But I’d bet next week’s paycheck that they have some collateral.

–Peter

PS - For full disclosure on that wager, I’m self-employed doing taxes, I don’t expect any income next week. Wrong time of year. That’s how confident I am. Well, perhaps slightly more. I can toss in a coffee to sweeten the pot. :wink:

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