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There is precedent for this kind of trickery being played. For example, Honeywell acquired Garrett AiResearch, a well known manufacturer of turbochargers for c
by sspiff 5mo ago
There is precedent for this kind of trickery being played.
For example, Honeywell acquired Garrett AiResearch, a well known manufacturer of turbochargers for combustion engines, through a series of mergers.
Later on, it loaded them up with debt (over $1.5 billion, mostly asbestos related indemnity obligations from other parts of the business), before spinning them out as an independent entity again. Two years later, Garrett filed for bankruptcy claiming it was succumbing to the unsustainable debt burden placed upon it by its former owner.
- stevefan1999 5mo agoSo you mean...marrying someone but transfer all the personal debt to the others, then divorcing so that I have no responsibility whatsoever? Not even an obligation to settle for the debt just like disappeared through an expired relationship?
- BigTuna 5mo agoWelcome to late stage capitalism
- nashashmi 5mo agoIs there a legal term for this kind of restructuring of debt?
- Ozzie_osman 5mo ago"Private Equity"
- stevefan1999 5mo agoI vibe asked it on Kagi Assistant and it said the closet relevant result is https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy To me it seems more like leveraged buyouts + debt restructuring all at once. I rather coin this term "debt offloading", which could also cover the cases with Enron for the tactics they used about 25 years ago
- FireBeyond 5mo agoAs soon as you mention Texas Two-step, you'll get a chorus of people who argue that it's a good thing, that it's really the defendants doing the plaintiffs a favor and making it easier and cheaper to sue them and the fact that each company that has done this has snuck out of between 90 and 99% of its obligations and washed their hands of them is a complete coincidence and that just wait, you'll see, the next time a company does it (using the same law firm that has handled all these) they'll really, truly, cover all of their obligations, perhaps even more, and at less cost and effort to their beleaguered plaintiffs.
- svpernatvral 5mo agoScamming the state through private debt emission.
- FireBeyond 5mo agoIn personal terms there is the "deathbed divorce", a uniquely American construct where couples, often elderly, get divorced while one is in hospital or hospice in an attempt to not saddle their soon to be widowed partner with six digits of medical debt. In another uniquely American construct, that won't stop hospitals calling up all their relatives either implying that they are now responsible for those debts, or that it would be a mark of respect and honor if, even not, the relative would be willing to settle them anyway.
- renticulous 5mo agoPerplexity wants to buy Google Chrome vibes.
- dpoloncsak 5mo agoI believe this is what they call the 'Texas Two-Step'
- unixhero 5mo agoSure it is not a Kansas City shuffle?
- dpoloncsak 5mo agopretty sure you're just making a joke but the specific legislation exploited here is only present in Texas and Delaware iirc. Not a lawyer though