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Am I missing something or does this NYT article not actually say what the judge based his decision on? That would be an important piece of information to have w

by thorum 2y ago

Am I missing something or does this NYT article not actually say what the judge based his decision on? That would be an important piece of information to have when deciding whether the decision was good or not.

gms7777 2y ago
From the article: "Judge Lopez said that the bankruptcy auction failed to maximize the amount of money that the sale of Infowars should provide to Mr. Jones’s creditors, including the Sandy Hook families, in part because the bids were submitted in secret. “It seemed doomed almost from the moment they decided to go to a sealed bid,” Judge Lopez said. “Nobody knows what anybody else is bidding,” he added."
- nativeit 2y ago
  Wait, couldn’t this same argument be made in reverse? If the bids were open, the competing parties could simply go $1 above the highest offer, which suggest sealed bids are most appropriate to maximize the value. Auctions can’t be fairly judged in hindsight, generally speaking.
  - exac 2y ago
    They could do an open run-off round of bids until they have two potential buyers, and then switch to secret ballot to get each party's highest bid I suppose?
  - AnthonyMouse 2y ago
    If the bids are secret and the highest bidder pays what they bid then bidders have the incentive to try to bid strategically, i.e. less than what they'd be willing to pay as long as they think that's more than anyone else would be willing to pay. Plus, if there is someone who thinks it's worth way more than anyone else, they could just place a modest bid and then if they lose buy it from the winner for $1 more than what the winner values it at anyway. The way you can avoid this with secret bids is to specify that the highest bidder will pay $1 more than the second highest bidder no matter how high they bid. Then everyone has the incentive to actually specify the maximum they'd be willing to pay, because if the next highest bid is lower than that they still actually do want to buy it, but they lose nothing by bidding higher because they only pay a dollar more than the next highest bidder no matter what, and then you maximize bids. But by that point you don't benefit from keeping the high bid a secret anymore, because of human psychology. Someone bids $100, is the current high bidder and thinks they're getting to buy it, then someone outbids them and loss aversion kicks in so they make a higher bid, even though the first bid was supposed to be their max.
    - llimllib 2y ago
      Known as a "second-price" or Vickrey auction for anybody who wants to read some auction game theory: https://en.wikipedia.org/wiki/Vickrey_auction https://en.wikipedia.org/wiki/Vickrey_auction
    - freejazz 2y ago
      Yeah but in the bankruptcy setting, this would demonstrate that the trustee didn't get as much as they could.
      - AnthonyMouse 2y ago
        Does it? If it's public knowledge that Alice would pay $200 and Bob would pay $100 then Alice wouldn't actually bid $200, she'd bid $101 and still win, the same result as that type of auction. If nobody knows what Alice would bid except Alice then it's even worse, because Bob thinks he could win at $60 and would rather pay $60 than $100 and Alice correctly predicts that Bob is going to do that and then wins by bidding $75. And if Bob bids $80 then Alice can still buy it from Bob for $110 but the estate is still getting $80 instead of $101.
        rob_c 2y ago
        Go bank to pseudo security. This is the letter of an argument again ingnoring the spirit of the judgment/law/...
        johnnyanmac 2y ago
        The spirit is that a person owes families he defamed billions of dollars and that person doesn't like who they need to sell their assets to to make that money. I don't even know how and why the details of how this money is recouped is important. If I go bankrupt and need to sell my house, I sure can't stop it from being sold to Hitler or something absurd like that.
        freejazz 2y ago
  - logifail 2y ago
    > If the bids were open, the competing parties could simply go $1 above the highest offer [..] Isn't that what you want to happen? All the auctions I've ever participated have repeated this very process until none of the buyers are prepared to raise their bid, at which point it appears the seller has got the highest price anyone will offer. What am I missing?
    - uberman 2y ago
      sealed bidding entices bidders who really want something to overbid to ensure they win. It is a common strategy to maximize offers
    - a4isms 2y ago
      In some parts of the world, they auction houses in this exact manner. You show up, post a very large amount of money to prove you're serious, then everyone bids in person like an art auction. Here in Canada, when the market is hot there are lots of auctions withe multiple buyers competing for a house. In my market (Southern Ontario), it is almost always a sealed bid situation, and winning buyers often outbid their rivals by tens of thousands of dollars. The agents around here are fond of a process engineered to maximize the bids: If there are multiple bids that are all reasonable, they will tell the lowballs to go home, while telling those remaining how many bids are in, and offering everyone a chance to "sweeten up" before a final decision is made. I personally would never buy a home through such a process, which tells you that I absolutely would love to sell my home in exactly this fashion should the market be hot whenever that happens. Now that being said, I cannot say for certain whether the frenzy of shouting bids while staring your opponents in the eye will produce more money or the sealed bids will produce more money.
    - michaelt 2y ago
      In theory, a Second-price sealed-bid auction will produce the same price as an Open ascending-bid auction. Every bidder will offer the true value of the item to them, and the item will go to the highest bidder at the second-highest price. But some people might think, due to human nature, that one auction or the other gets higher prices. Maybe an open bid auction gets lower bids, because interested people start lower knowing they can bid again, then back out when they see there's a lot of competition. Maybe sealed-bid auctions work better for large organisations, as getting board approval and CFO sign-off on a multi-million-dollar expenditure takes a few days. Or maybe an open bid auction gets bidders het up and excited because they're in second place and surely no matter what you've bid, you'd always bid 5% more to win - right? None of which is backed by theory, but if it feels true to the judge - who's to say? IMHO the main value of buying infowars, to The Onion, was the publicity and headlines. Those are harvested now. If the auction was repeated I can't imagine The Onion upping their bid.
NoGravitas 2y ago
This is the legal pretext, which appears about 2/3 of the way through the article: > Judge Lopez said that the bankruptcy auction failed to maximize the amount of money that the sale of Infowars should provide to Mr. Jones’s creditors, including the Sandy Hook families, in part because the bids were submitted in secret.
- lcnPylGDnU4H9OF 2y ago
  > auction failed to maximize the amount of money I don't run auctions but something tells me there's a lot of research behind them that goes into optimizing for this precise thing. It's wild that the judge is disregarding the expertise of the person who was appointed by another judge to run the auction without asserting that the person is not qualified to run it.
  - cogman10 2y ago
    It is quite wild and frankly just shocking. The hearings in the last 2 days seemed to have Lopez agreeing with the creditors and not Jone's FUAC. Yet, somewhat seemingly out of the blue, he decided to deny the sale. What's even more crazy about this ruling is he's told the trustee to come up with an alternative solution, that doesn't involve a new auction... But like no other guidance. That leaves the Trustee in a weird situation where the judge has said "I don't like what you did, fix it somehow, but not in a way that uses a new auction". Frankly, this judge has just been pretty bad at their job. More than a few rulings have been just weird ramblings from the judge with unclear instructions to the trustee and the other parties. And all this mainly appears to be because the judge doesn't like the amount that Infowars was sold for.
    - singleshot_ 2y ago
      Out of curiosity, does anyone in this thread who is commenting on the quality of this judge or the sanity of his ruling practice bankruptcy law? I don’t, and I’m having a hard time evaluating these claims.
      - 2y ago
throwaway984393 2y ago
[dead]
anigbrowl 2y ago
You're not missing anything. Most US legal reporting complete shit, opting to write about the implications rather than do any legal analysis.
throwaway48476 2y ago
Journalists almost never cite and link to sources either. They make it so hard to verify anything.
OneLeggedCat 2y ago
NYT reporting has been trash for at least 10 years. Anyway Matt Levine, who has as good an opinion on this kind of thing as any columnist, sees it as mostly a technicality, and believes Onion can just submit their bid again. Of course, Elon also now has an outside interest, and can outbid anyone via proxy or otherwise.
- Nemo_bis 2y ago
  Matt Levine quote: > That strikes me as mostly wrong? One, it is not really impossible to value the families’ claims; they have won judgments in court. Two, “whatever the Connecticut Families decide to do with distributions” obviously adds to the value of The Onion’s bid, if what they do with the distributions is give them to other creditors. Three, it is not so much “a text book example of collusion” as it is a pretty standard case of the biggest creditor of a bankruptcy estate using its debt to subsidize its bid for the assets. It’s pretty normal stuff. > > I don’t know? Global Tetrahedron’s bid was “$100,000 more than anyone else will pay,” so it’s not clear how much an auction would have helped. I suppose now they can have another auction and Global Tetrahedron can just bid $100,000 — or $1 — more than whatever FUAC bids, including the families’ waiver, and win the auction again. https://www.bloomberg.com/opinion/articles/2024-12-11/the-onion-can-t-buy-infowars-yet https://www.bloomberg.com/opinion/articles/2024-12-11/the-on... (https://archive.ph/uetH6 https://archive.ph/uetH6)

by thorum 2y ago

gms7777 2y ago

From the article: "Judge Lopez said that the bankruptcy auction failed to maximize the amount of money that the sale of Infowars should provide to Mr. Jones’s creditors, including the Sandy Hook families, in part because the bids were submitted in secret. “It seemed doomed almost from the moment they decided to go to a sealed bid,” Judge Lopez said. “Nobody knows what anybody else is bidding,” he added."

nativeit 2y ago
Wait, couldn’t this same argument be made in reverse? If the bids were open, the competing parties could simply go $1 above the highest offer, which suggest sealed bids are most appropriate to maximize the value. Auctions can’t be fairly judged in hindsight, generally speaking.
- exac 2y ago
  They could do an open run-off round of bids until they have two potential buyers, and then switch to secret ballot to get each party's highest bid I suppose?
- AnthonyMouse 2y ago
  If the bids are secret and the highest bidder pays what they bid then bidders have the incentive to try to bid strategically, i.e. less than what they'd be willing to pay as long as they think that's more than anyone else would be willing to pay. Plus, if there is someone who thinks it's worth way more than anyone else, they could just place a modest bid and then if they lose buy it from the winner for $1 more than what the winner values it at anyway. The way you can avoid this with secret bids is to specify that the highest bidder will pay $1 more than the second highest bidder no matter how high they bid. Then everyone has the incentive to actually specify the maximum they'd be willing to pay, because if the next highest bid is lower than that they still actually do want to buy it, but they lose nothing by bidding higher because they only pay a dollar more than the next highest bidder no matter what, and then you maximize bids. But by that point you don't benefit from keeping the high bid a secret anymore, because of human psychology. Someone bids $100, is the current high bidder and thinks they're getting to buy it, then someone outbids them and loss aversion kicks in so they make a higher bid, even though the first bid was supposed to be their max.
  - llimllib 2y ago
    Known as a "second-price" or Vickrey auction for anybody who wants to read some auction game theory: https://en.wikipedia.org/wiki/Vickrey_auction https://en.wikipedia.org/wiki/Vickrey_auction
  - freejazz 2y ago
    Yeah but in the bankruptcy setting, this would demonstrate that the trustee didn't get as much as they could.
    - AnthonyMouse 2y ago
      Does it? If it's public knowledge that Alice would pay $200 and Bob would pay $100 then Alice wouldn't actually bid $200, she'd bid $101 and still win, the same result as that type of auction. If nobody knows what Alice would bid except Alice then it's even worse, because Bob thinks he could win at $60 and would rather pay $60 than $100 and Alice correctly predicts that Bob is going to do that and then wins by bidding $75. And if Bob bids $80 then Alice can still buy it from Bob for $110 but the estate is still getting $80 instead of $101.
      - rob_c 2y ago
        Go bank to pseudo security. This is the letter of an argument again ingnoring the spirit of the judgment/law/...
        johnnyanmac 2y ago
        The spirit is that a person owes families he defamed billions of dollars and that person doesn't like who they need to sell their assets to to make that money. I don't even know how and why the details of how this money is recouped is important. If I go bankrupt and need to sell my house, I sure can't stop it from being sold to Hitler or something absurd like that.
        freejazz 2y ago
- logifail 2y ago
  > If the bids were open, the competing parties could simply go $1 above the highest offer [..] Isn't that what you want to happen? All the auctions I've ever participated have repeated this very process until none of the buyers are prepared to raise their bid, at which point it appears the seller has got the highest price anyone will offer. What am I missing?
  - uberman 2y ago
    sealed bidding entices bidders who really want something to overbid to ensure they win. It is a common strategy to maximize offers
  - a4isms 2y ago
    In some parts of the world, they auction houses in this exact manner. You show up, post a very large amount of money to prove you're serious, then everyone bids in person like an art auction. Here in Canada, when the market is hot there are lots of auctions withe multiple buyers competing for a house. In my market (Southern Ontario), it is almost always a sealed bid situation, and winning buyers often outbid their rivals by tens of thousands of dollars. The agents around here are fond of a process engineered to maximize the bids: If there are multiple bids that are all reasonable, they will tell the lowballs to go home, while telling those remaining how many bids are in, and offering everyone a chance to "sweeten up" before a final decision is made. I personally would never buy a home through such a process, which tells you that I absolutely would love to sell my home in exactly this fashion should the market be hot whenever that happens. Now that being said, I cannot say for certain whether the frenzy of shouting bids while staring your opponents in the eye will produce more money or the sealed bids will produce more money.
  - michaelt 2y ago
    In theory, a Second-price sealed-bid auction will produce the same price as an Open ascending-bid auction. Every bidder will offer the true value of the item to them, and the item will go to the highest bidder at the second-highest price. But some people might think, due to human nature, that one auction or the other gets higher prices. Maybe an open bid auction gets lower bids, because interested people start lower knowing they can bid again, then back out when they see there's a lot of competition. Maybe sealed-bid auctions work better for large organisations, as getting board approval and CFO sign-off on a multi-million-dollar expenditure takes a few days. Or maybe an open bid auction gets bidders het up and excited because they're in second place and surely no matter what you've bid, you'd always bid 5% more to win - right? None of which is backed by theory, but if it feels true to the judge - who's to say? IMHO the main value of buying infowars, to The Onion, was the publicity and headlines. Those are harvested now. If the auction was repeated I can't imagine The Onion upping their bid.

NoGravitas 2y ago

This is the legal pretext, which appears about 2/3 of the way through the article: > Judge Lopez said that the bankruptcy auction failed to maximize the amount of money that the sale of Infowars should provide to Mr. Jones’s creditors, including the Sandy Hook families, in part because the bids were submitted in secret.

lcnPylGDnU4H9OF 2y ago
> auction failed to maximize the amount of money I don't run auctions but something tells me there's a lot of research behind them that goes into optimizing for this precise thing. It's wild that the judge is disregarding the expertise of the person who was appointed by another judge to run the auction without asserting that the person is not qualified to run it.
- cogman10 2y ago
  It is quite wild and frankly just shocking. The hearings in the last 2 days seemed to have Lopez agreeing with the creditors and not Jone's FUAC. Yet, somewhat seemingly out of the blue, he decided to deny the sale. What's even more crazy about this ruling is he's told the trustee to come up with an alternative solution, that doesn't involve a new auction... But like no other guidance. That leaves the Trustee in a weird situation where the judge has said "I don't like what you did, fix it somehow, but not in a way that uses a new auction". Frankly, this judge has just been pretty bad at their job. More than a few rulings have been just weird ramblings from the judge with unclear instructions to the trustee and the other parties. And all this mainly appears to be because the judge doesn't like the amount that Infowars was sold for.
  - singleshot_ 2y ago
    Out of curiosity, does anyone in this thread who is commenting on the quality of this judge or the sanity of his ruling practice bankruptcy law? I don’t, and I’m having a hard time evaluating these claims.
    - 2y ago

throwaway984393 2y ago

[dead]

anigbrowl 2y ago

You're not missing anything. Most US legal reporting complete shit, opting to write about the implications rather than do any legal analysis.

throwaway48476 2y ago

Journalists almost never cite and link to sources either. They make it so hard to verify anything.

OneLeggedCat 2y ago

NYT reporting has been trash for at least 10 years. Anyway Matt Levine, who has as good an opinion on this kind of thing as any columnist, sees it as mostly a technicality, and believes Onion can just submit their bid again. Of course, Elon also now has an outside interest, and can outbid anyone via proxy or otherwise.

Nemo_bis 2y ago
Matt Levine quote: > That strikes me as mostly wrong? One, it is not really impossible to value the families’ claims; they have won judgments in court. Two, “whatever the Connecticut Families decide to do with distributions” obviously adds to the value of The Onion’s bid, if what they do with the distributions is give them to other creditors. Three, it is not so much “a text book example of collusion” as it is a pretty standard case of the biggest creditor of a bankruptcy estate using its debt to subsidize its bid for the assets. It’s pretty normal stuff. > > I don’t know? Global Tetrahedron’s bid was “$100,000 more than anyone else will pay,” so it’s not clear how much an auction would have helped. I suppose now they can have another auction and Global Tetrahedron can just bid $100,000 — or $1 — more than whatever FUAC bids, including the families’ waiver, and win the auction again. https://www.bloomberg.com/opinion/articles/2024-12-11/the-onion-can-t-buy-infowars-yet https://www.bloomberg.com/opinion/articles/2024-12-11/the-on... (https://archive.ph/uetH6 https://archive.ph/uetH6)