4 ms·

I was trying to reason through why somebody would step in as CEO specifically for the bankruptcy. How does he get compensated? I’m assuming it’s not simply a g

I was trying to reason through why somebody would step in as CEO specifically for the bankruptcy. How does he get compensated? I’m assuming it’s not simply a goodwill/hobby thing

solresol 4y ago
He's a specialist in bankruptcy and liquidation administration. Essentially the debtors have appointed him to take over and identify what can be sold or salvaged. He gets paid out of whatever funds he can find.
- adam_arthur 4y ago
  Ah yeah, that makes sense. I’m surprised the debtors assumed control of the company that quickly though. Figured it would take some time to play out
  - skippyboxedhero 4y ago
    It starts when bankruptcy is filed. Ofc, if I lend $100m to a company that you control, and you start siphoning that money into your bank account...then you aren't going to declare bankruptcy until the stealing is finished. So there are provisions to claw back money even ex-post (i.e. time doesn't matter) when someone has committed a crime...but the idea is that bankruptcies are wrapped up quickly because the longer it goes on the more value is lost by everyone (apart from lawyers)...speedy liquidation is also a central component of a well-functioning capitalist economy.
  - dragonwriter 4y ago
    > I’m surprised the debtors assumed control of the company that quickly though. ”Debtors” are people that owe money (i.e., here, the FTX family of corps). This is not a case where the creditors (the people to whom money is owed) are in possession (or even yet identified), though that can happen in bankruptcy.
aksss 4y ago
He’s there on behalf of the new owners (the people who FTX owed money to) and his job is to untangle what happened, see what can be salvaged if anything, and then part up the carcass and dispose of it. Read his filing and in the first three pages he explains what he’s doing there and what his priorities are. He’s basically a trusted neutral party who’s made a career of stepping in to sort out messes like this. A very niche career track and nothing like the job of a CEO in a healthy organization. More like part forensic investigator, part salvage operator, part corp lawyer.
dragonwriter 4y ago
> How does he get compensated? Thr bankruptcy court lets the bankrupt entity spend money (woth supervision) on tasks essential to what it needs to do in bankruptcy, including paying employees needed for that worm.

I was trying to reason through why somebody would step in as CEO specifically for the bankruptcy. How does he get compensated? I’m assuming it’s not simply a goodwill/hobby thing

solresol 4y ago

He's a specialist in bankruptcy and liquidation administration. Essentially the debtors have appointed him to take over and identify what can be sold or salvaged. He gets paid out of whatever funds he can find.

adam_arthur 4y ago
Ah yeah, that makes sense. I’m surprised the debtors assumed control of the company that quickly though. Figured it would take some time to play out
- skippyboxedhero 4y ago
  It starts when bankruptcy is filed. Ofc, if I lend $100m to a company that you control, and you start siphoning that money into your bank account...then you aren't going to declare bankruptcy until the stealing is finished. So there are provisions to claw back money even ex-post (i.e. time doesn't matter) when someone has committed a crime...but the idea is that bankruptcies are wrapped up quickly because the longer it goes on the more value is lost by everyone (apart from lawyers)...speedy liquidation is also a central component of a well-functioning capitalist economy.
- dragonwriter 4y ago
  > I’m surprised the debtors assumed control of the company that quickly though. ”Debtors” are people that owe money (i.e., here, the FTX family of corps). This is not a case where the creditors (the people to whom money is owed) are in possession (or even yet identified), though that can happen in bankruptcy.

aksss 4y ago

He’s there on behalf of the new owners (the people who FTX owed money to) and his job is to untangle what happened, see what can be salvaged if anything, and then part up the carcass and dispose of it. Read his filing and in the first three pages he explains what he’s doing there and what his priorities are. He’s basically a trusted neutral party who’s made a career of stepping in to sort out messes like this. A very niche career track and nothing like the job of a CEO in a healthy organization. More like part forensic investigator, part salvage operator, part corp lawyer.

dragonwriter 4y ago

> How does he get compensated? Thr bankruptcy court lets the bankrupt entity spend money (woth supervision) on tasks essential to what it needs to do in bankruptcy, including paying employees needed for that worm.