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Litigation takes years to play out, paying the lease would result in bankruptcy imminently. Plan is to live another day, long enough to stabilize finances, and
by nostrademons 4y ago
Litigation takes years to play out, paying the lease would result in bankruptcy imminently. Plan is to live another day, long enough to stabilize finances, and then unload it on the public markets where the litigation becomes somebody else's problem.
- jsnell 4y agoThis is Musk stiffing a supplier for $100k. That seems unlikely to make their bankruptcy any more imminent. But it does signal (on the record, not just rumours) to literally anybody that Twitter is doing business with that they are distressed, and should be extended no credit. Payment up front, or no service.
- IG_Semmelweiss 4y agoSeems a reasonable for a service company with no inputs to COGS that are on credit terms. Payroll is not on credit, and most infra is metal, or on some VP's CC, anyway. The reasonable signal is yes indeed for Twitter vendors, if you are opex and a long contract, be ready to have our lawyers sit down and hash it out.
- HarryHirsch 4y agoit does signal ... that Twitter ... are distressed Disagree - this is automobile industry tactics where you pay your suppliers late and short because they have no choice. Musk is negotiating for lower rent.
- phpisthebest 4y agoYep... Ford, GM, and the rest have played that game for years, including just telling suppliers they are now going to pay less for parts.... and since the suppliers have built their business around that one contract there is not much they can do about
- basketdryer 4y ago> they have no choice A commercial landlord in downtown SF has many, many choices. The power imbalance here is not even remotely close to the one given in your analogy.
- plorkyeran 4y agoI think you may have missed the last three years. There is currently a very large amount of empty office space in SF.
- enkid 4y agoLitigation takes years, but eviction normally takes much less time.
- dathinab 4y agoIn some countries delaying filling for insolvency this way is a crime which is hold against the person responsible for it (instead of the company). So I'm not sure this is the case tbh. but I'm also not sure if this applies here and I don't know the respective US laws.
- butlerm 4y agoIn the United States creditors can file a petition for an involuntary bankruptcy, which if granted would effectively put the company into receivership and no doubt under less friendly administration than a voluntary Chapter 11 filing.