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
It depends on who the creditors are. And what type of credit. PEs will not allow slow roll - that’s their chance or getting an asset. Banks on the other hand might not want to manage an asset and might be ok to slow roll. And operating leases might get waivers etc
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Replying to @walnutavevalue @LAForeverHall
I think the counter party is the biggest determinant. Esp risky if PE or a famous value investor owns the debt
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Replying to @walnutavevalue @LAForeverHall
Liz - you wrote something in the past about how operating leases get broken during tough time. Can you please give a high level overview again? Were you talking about clause about breaking the lease (Eg: pay one year rent) in the contract? Or that waivers can be negotiated?
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It’s section 502(b)(6) of the bankruptcy code
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