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>The other creditors are far better off getting more cash The other creditors get more cash from The Onion's offer. It was specifically structured to give bett

>The other creditors are far better off getting more cash The other creditors get more cash from The Onion's offer. It was specifically structured to give better-than-next-offer remuneration to minority creditors.

wakawaka28 2y ago
The Onion didn't have the cash. It was basically an IOU from one of the families, which is like saying "the very same guy going bankrupt is going to pay us money to buy this business from him" and that makes zero sense. There was also no transparency in the bidding. It should have been a simple auction, to get the maximum amount of money.
- ThrustVectoring 2y ago
  > The Onion didn't have the cash. Correct, it was given up by the majority creditors in exchange for non-monetary considerations (specifically, the moral victory of having The Onion own Infowars). > It was basically an IOU from one of the families This is fine, people are allowed to act against their own financial interests. That's one thing that having ownership means is that you can ruin the thing you own for any or no reason. The court has zero reason to intervene if a majority creditor is giving up their own share of the proceeds for any or no reason. > There was also no transparency in the bidding. It should have been a simple auction, to get the maximum amount of money. This is a non-issue, the trustee was given wide latitude to dispose of the assets in any way he deems fit.
  - wakawaka28 2y ago
    >This is fine, people are allowed to act against their own financial interests. That's one thing that having ownership means is that you can ruin the thing you own for any or no reason. The court has zero reason to intervene if a majority creditor is giving up their own share of the proceeds for any or no reason. You're oversimplifying this. If someone owes you $1B and they owe me $2B, and they've got an asset worth $500M, I can't just pledge $2B of bad debt to buy the asset. The only fair way is to sell it for $500M in actual cash. Then it gets divied up accordingly. >This is a non-issue, the trustee was given wide latitude to dispose of the assets in any way he deems fit. Isn't it telling that the same judge said it was done improperly? Trustees have an obligation to follow standard practices which maximize cash flow or at least don't give the appearance of impropriety.
    - ThrustVectoring 2y ago
      > You're oversimplifying this. If someone owes you $1B and they owe me $2B, and they've got an asset worth $500M, I can't just pledge $2B of bad debt to buy the asset. You actually can, so long as it's the best offer for the other creditors. So long as you can come up with sufficient cash for the minority creditors you're entitled to dispose of the asset in any way you see fit. The Pennsylvania families came up with the cash (via The Onion's cash offer and structuring the payout).
      - wakawaka28 2y ago
        My point is going over your head. Pledging money that you will never receive to get over the finish line is not the best offer. You could not consider such debt in any other purchase. Going back to that example, if the guy owed $2B pledged to buy the asset for $500M and the other one didn't even know about the auction, or instead pledged $501M, then the one who was owed less would be stealing from the one who was owed more. The fact that neither of them has any actual money is another very troublesome point on its own, as is the fact that the bidding was completely private. There might have been someone willing to pay 10x the winning bid for InfoWars in actual cash and been out of the loop. Put it in any other context. Do you think a bank would issue a loan whose repayment was contingent on income from an individual who was seeking relief in bankruptcy? Obviously they would not. The court has an obligation to not accept fugazi money to buy real assets.
        edmundsauto 2y ago
        My understanding is that the other (minor) creditors would get more cash in the Onion offer because the Sandy hook reps weren’t going to take their huge cut in the event their preferred bid was accepted. That means in any other deal, the other creditors would be strictly worse off. The families would be financially worse off but they were the ones driving the decision, so they clearly felt holistically better off. I don’t see how they shouldn’t be able to take less money themselves as long as the other creditors also got more money.
      - pclmulqdq 2y ago
norlygfyd 2y ago
> It was specifically structured to give better-than-next-offer That is the most farcical bit. When you strip away all the legalese, the offer was literally formulated as "next best offer + $". That is not a valid sealed-bid offer.

wakawaka28 2y ago

The Onion didn't have the cash. It was basically an IOU from one of the families, which is like saying "the very same guy going bankrupt is going to pay us money to buy this business from him" and that makes zero sense. There was also no transparency in the bidding. It should have been a simple auction, to get the maximum amount of money.

ThrustVectoring 2y ago
> The Onion didn't have the cash. Correct, it was given up by the majority creditors in exchange for non-monetary considerations (specifically, the moral victory of having The Onion own Infowars). > It was basically an IOU from one of the families This is fine, people are allowed to act against their own financial interests. That's one thing that having ownership means is that you can ruin the thing you own for any or no reason. The court has zero reason to intervene if a majority creditor is giving up their own share of the proceeds for any or no reason. > There was also no transparency in the bidding. It should have been a simple auction, to get the maximum amount of money. This is a non-issue, the trustee was given wide latitude to dispose of the assets in any way he deems fit.
- wakawaka28 2y ago
  >This is fine, people are allowed to act against their own financial interests. That's one thing that having ownership means is that you can ruin the thing you own for any or no reason. The court has zero reason to intervene if a majority creditor is giving up their own share of the proceeds for any or no reason. You're oversimplifying this. If someone owes you $1B and they owe me $2B, and they've got an asset worth $500M, I can't just pledge $2B of bad debt to buy the asset. The only fair way is to sell it for $500M in actual cash. Then it gets divied up accordingly. >This is a non-issue, the trustee was given wide latitude to dispose of the assets in any way he deems fit. Isn't it telling that the same judge said it was done improperly? Trustees have an obligation to follow standard practices which maximize cash flow or at least don't give the appearance of impropriety.
  - ThrustVectoring 2y ago
    > You're oversimplifying this. If someone owes you $1B and they owe me $2B, and they've got an asset worth $500M, I can't just pledge $2B of bad debt to buy the asset. You actually can, so long as it's the best offer for the other creditors. So long as you can come up with sufficient cash for the minority creditors you're entitled to dispose of the asset in any way you see fit. The Pennsylvania families came up with the cash (via The Onion's cash offer and structuring the payout).
    - wakawaka28 2y ago
      My point is going over your head. Pledging money that you will never receive to get over the finish line is not the best offer. You could not consider such debt in any other purchase. Going back to that example, if the guy owed $2B pledged to buy the asset for $500M and the other one didn't even know about the auction, or instead pledged $501M, then the one who was owed less would be stealing from the one who was owed more. The fact that neither of them has any actual money is another very troublesome point on its own, as is the fact that the bidding was completely private. There might have been someone willing to pay 10x the winning bid for InfoWars in actual cash and been out of the loop. Put it in any other context. Do you think a bank would issue a loan whose repayment was contingent on income from an individual who was seeking relief in bankruptcy? Obviously they would not. The court has an obligation to not accept fugazi money to buy real assets.
      - edmundsauto 2y ago
        My understanding is that the other (minor) creditors would get more cash in the Onion offer because the Sandy hook reps weren’t going to take their huge cut in the event their preferred bid was accepted. That means in any other deal, the other creditors would be strictly worse off. The families would be financially worse off but they were the ones driving the decision, so they clearly felt holistically better off. I don’t see how they shouldn’t be able to take less money themselves as long as the other creditors also got more money.
    - pclmulqdq 2y ago

norlygfyd 2y ago

> It was specifically structured to give better-than-next-offer That is the most farcical bit. When you strip away all the legalese, the offer was literally formulated as "next best offer + $". That is not a valid sealed-bid offer.