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Do you have examples of big companies abandoning debts like that? The opposite actually comes to my mind: large companies being destroyed by their inability to
by maweaver 17y ago
Do you have examples of big companies abandoning debts like that? The opposite actually comes to my mind: large companies being destroyed by their inability to get rid of underwater debts (putting aside big banks' recent problems, I'm thinking of Enron here)
- chrisgoodrich 17y agoGeneral Motors comes to mind. Bankruptcy allows them to abandon their debt and continue to operate with only the best assets as the "New GM." Basically all the same assets, screwed the stockholders and debtors, but a new company.
- mrkurt 17y agoIgnoring bankruptcy for a second, big companies walk away from contracts all the time. Those contracts normally stipulate that one company will pay another company a certain amount of money over a particular time period, which is effectively debt. The difference between that and a mortgage is that the big companies are usually on a more equal negotiation footing than homeowners are with banks. So rather than signing a boilerplate agreement, they have teams of lawyers to pick things over, write outs, etc. So when they choose to "walk away", they usually have some reasonable way to do it and still comply with the contract.