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>Which is really better for all involved Not for better managed competitors.
by fauigerzigerk 8y ago
>Which is really better for all involved
Not for better managed competitors.
- shaki-dora 8y agoWell, as part of the reorganization, the company needs to find new capital. If they are deemed badly managed, and any new plans aren’t convincing, they will have a hard time doing so and will disappear. It’s really like a startup rising from the ruins of the previous attempt.
- AngryData 8y agoI think the old business will have a far easier time managing to secure capital and loans than a new entrepreneur, which is a boon for the guys already with money and being paid big bucks to administrate, but pretty horrible for the small guy that has newer and better ideas.
- rhino369 8y agoWho aren't parties to the bankruptcy, so who cares? The public benefits from increased competition.
- fauigerzigerk 8y agoI'm not against Chapter 11, but whether or not the public benefits depends on the specifics of the case. Sometimes unproductive companies are kept in business for far too long because there is political pressure. In the long run, it's not good for anyone if workers remain in unproductive jobs instead of moving on. It depresses salaries, erodes skills and saddles the financial system with debt of questionable quality. But Chapter 11 is certainly not a prerequisite for that. I think most zombie companies that are being kept alive never enter anything like Chapter 11. So I think Chapter 11 is good and necessary to avoid the sudden death of companies worth restructuring.