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How would this work out in US bankruptcy court? My first reaction is that contracting on insolvency events is pretty stupid, since there is no more money or fir
by wjnc 4y ago
How would this work out in US bankruptcy court? My first reaction is that contracting on insolvency events is pretty stupid, since there is no more money or firm to pay you. But perhaps things work differently?
- bombcar 4y agoIt counts as a creditor and the judge has pretty large leeway in negotiating how it gets paid out. They might be lucky enough to get removal costs but I doubt anything more. These contract clauses are to prevent FTX going through restructuring and keeping the naming rights without payment, basically.
- SilverBirch 4y agoInsolvency absolutely doesn't mean there's no more money or firm to pay you. They're seeking bankruptcy protection because they have money, but not as much as they owe. So now someone has to go through every penny that FTX owes, who it owes that money to, and in what order. Then they either sell off FTX or its assets, and use the money to pay the creditors. What this article is basically saying is that this Arena is now a creditor to FTX. In this particular situation, sure, they're unlikely to get a penny back, but that doesn't mean that there were no situation where they could've been paid.
- autotune 4y agoSome furniture store is probably going to get a great deal on office chairs, and some lucky investor will be able to buy up all their MacBook Pros at auction.