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They (Xcor) also asserted that 35% of the ticket price would be held in 3rd party escrow for such an eventuality, which the 3rd party now asserts is not correct
by shakna 8y ago
They (Xcor) also asserted that 35% of the ticket price would be held in 3rd party escrow for such an eventuality, which the 3rd party now asserts is not correct. That is very likely to be fraud.
- lisper 8y agoYes, that's true. But good luck recovering damages from a bankrupt defendant.
- shakna 8y agoI know the US is different and strange, in that a corporation is a person... ... But where I am, bankruptcy only lasts 3 years + 1 day, after which point, those that had shares within the entity that has failed, or the part-owners, will be required to begin paying back their debts. Bankruptcy is not a failsafe to prevent you paying all debts. It's just a timeout to give you time to be in a position to pay those debts. And yes, it can be declared multiple times, but it won't always be accepted.
- EGreg 8y agoWhat is the point of that, if the money invested is vastly more than what the owner can earn? The USA having bankruptcy protections is what helps foster this level of risk and entrepreneurship here.
- shakna 8y agoIt's not investments that need to get paid back - it's contracts, or rather the value of the contract. In this case, Xcor would need to pay back the fees they said would go to escrow. Not any investor who took equity on the gamble it would be worth something.
- toast0 8y agoWhere is Xcor supposed to get this money? They lost their revenue source, laid off all their employees, and any property they have is presumably not nearly enough to satisfy their debt. The business is almost certain to close pending the resolution of the bankruptcy. Certainly, if people were promised that there was money in escrow and it wasn't, that sounds like fraud, but that doesn't mean those who perpetuated the fraud have the money either.
- _cs2017_ 8y agoWherever you live, there are likely companies with limited liability of the owners. In the US they are corporations or LLCs or limited partnerships. In your country they may be named differently. See https://en.m.wikipedia.org/wiki/Limited_company https://en.m.wikipedia.org/wiki/Limited_company. When such a company runs out of money, nobody else will be required to come up with cash to pay its debts. You don't need to read the bankruptcy laws to verify that, it's just the definition of a limited liability.
- chimeracoder 8y ago> Yes, that's true. But good luck recovering damages from a bankrupt defendant. Fraud can pierce the veil, so it's not just the company that they can go after, but also anyone responsible for the fraud.
- garmaine 8y agoThat’s why it is in escrow.