Bonkers thought: IF Corona is a short term problem (call it a year), is there any reason companies shouldn't declare BK if they run into grumpy creditors, to kick the can? If results/the market improve by the end of the process, interesting cases might be made about valuation?
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Replying to @LAForeverHall
You thinking declare BK, wipe out the creditors and pensions, and emerge as low cost producers?
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Replying to @PythiaR
I mean possibly, but was thinking more along the lines of using it as a (rather expensive) stalling tactic if you trip your covenants/can't refinance/whatever to buy time until conditions improve. If Corona is short lived maybe better outcomes even for equity? I know it's cray.
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Replying to @LAForeverHall @PythiaR
Really risky. Mgmt could lose control of the process in bk and in general I’d say creditors in a distressed case pretty sharp-they’re not gonna let the process be slow rolled. Plus as post reorg equity, they have the not insignificant lever of deciding who runs the co post exit
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So it'd be quite a... Gambit? Thank you for your perspective, that's very helpful. :)pic.twitter.com/Hi7z08RqUp
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