4 ms·

Yeah but in the west it is based on claim seniority rather than like, hose foreign creditors first.

by loeg 3y ago

faeriechangling 3y ago
Which is why the west has been getting taken for a ride for years.
kube-system 3y ago
No, in the US, claims are paid out based on the type of debt, outlined in the Absolute Priority Rule.
- loeg 3y ago
  We are talking about the same concept but with different terminology. Not "No, ...".
  - kube-system 3y ago
    Maybe we are, but I'm not really sure 'seniority' is a great word to describe it. The term usually implies ranking due to duration. But it's really just a ranking prescribed by law. Often the shortest term lenders who are facilitating the bankruptcy process are first!
    - AlbertCory 3y ago
      "senior" is a term of art, and entirely appropriate: https://www.investopedia.com/terms/s/seniordebt.asp https://www.investopedia.com/terms/s/seniordebt.asp
      - kube-system 3y ago
        I stand corrected, thanks.
- nradov 3y ago
  Except when it's politically advantageous to change the rules. During the GM bankruptcy and bailout in 2009, President Obama gave his supporters in the UAW a sweetheart deal which allowed them to recover more than the other unsecured creditors. This set a terrible precedent and undermined the rule of law.
gerdesj 3y ago
In the UK, its basically HMRC first, then banks/building societies. If there is anything left, everyone else gets a share. The last one my company dealt with, we got about 10% of our exposure back. So we got £1,000 instead of the £10,000 that was owed. We then got to write that off as a loss. This monster is in a different league to anything I've dealt with but the principles here would largely be the same but with less transparency and more money wandering off for a chat with shady characters. I suspect that the rules I might follow may be joined by some rather more complicated ones, when the sums involved are large enough and the corporate structures are complicated enough.
blitzar 3y ago
* unless they bail out the company, and its shareholders, with billions in taxpayer subsidies

Yeah but in the west it is based on claim seniority rather than like, hose foreign creditors first.

by loeg 3y ago

Yeah but in the west it is based on claim seniority rather than like, hose foreign creditors first.

faeriechangling 3y ago

Which is why the west has been getting taken for a ride for years.

kube-system 3y ago

No, in the US, claims are paid out based on the type of debt, outlined in the Absolute Priority Rule.

loeg 3y ago
We are talking about the same concept but with different terminology. Not "No, ...".
- kube-system 3y ago
  Maybe we are, but I'm not really sure 'seniority' is a great word to describe it. The term usually implies ranking due to duration. But it's really just a ranking prescribed by law. Often the shortest term lenders who are facilitating the bankruptcy process are first!
  - AlbertCory 3y ago
    "senior" is a term of art, and entirely appropriate: https://www.investopedia.com/terms/s/seniordebt.asp https://www.investopedia.com/terms/s/seniordebt.asp
    - kube-system 3y ago
      I stand corrected, thanks.
nradov 3y ago
Except when it's politically advantageous to change the rules. During the GM bankruptcy and bailout in 2009, President Obama gave his supporters in the UAW a sweetheart deal which allowed them to recover more than the other unsecured creditors. This set a terrible precedent and undermined the rule of law.

gerdesj 3y ago

In the UK, its basically HMRC first, then banks/building societies. If there is anything left, everyone else gets a share. The last one my company dealt with, we got about 10% of our exposure back. So we got £1,000 instead of the £10,000 that was owed. We then got to write that off as a loss. This monster is in a different league to anything I've dealt with but the principles here would largely be the same but with less transparency and more money wandering off for a chat with shady characters. I suspect that the rules I might follow may be joined by some rather more complicated ones, when the sums involved are large enough and the corporate structures are complicated enough.

blitzar 3y ago

* unless they bail out the company, and its shareholders, with billions in taxpayer subsidies