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That's not true. Ford is more than $100 billion in debt. If a corporate raider were to take over Ford, they would be saddled with a ton of debt too, making such
by natnat 14y ago
That's not true. Ford is more than $100 billion in debt. If a corporate raider were to take over Ford, they would be saddled with a ton of debt too, making such a takeover a much less attractive option.
- rabidsnail 14y agoI didn't say that Ford is going to get raided. In fact I said that it isn't, because there isn't anybody big enough to do it. Although there probably is some way to siphon off the assets and default on the debt without committing fraud.
- photon137 14y agoYes, there is :). Take equity control of the company (which should be cheap enough for a badly-doing company) - now you'd have control over the financing decisions of the company. Issue "junior" debt uncollateralized by the company's assets. Use the cash so raised to buy off "senior"/"secured" debt outstanding in the market. When the company goes into bankruptcy, you get the first cut on the assets :). PS: Actually it's not so simple - when the company is highly leveraged, existing bondholders often do have a say in future financing decisions of the company.