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FTX creditors will make money on bankruptcy

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Re: FTX creditors will make money on bankruptcy

#41

Post by [deleted] »

Scoundreller wrote: post #19
linotype wrote: post #2

The people that sold their stakes to people like Scott Galloway must be kicking themselves. Great trade. https://www.youtube.com/watch?v=TPFiRlZaclQ

Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third: > “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “ Those were some expensive words…

[deleted]

Re: FTX creditors will make money on bankruptcy

#42

Post by flomo »

Scoundreller wrote: post #19
linotype wrote: post #2

The people that sold their stakes to people like Scott Galloway must be kicking themselves. Great trade. https://www.youtube.com/watch?v=TPFiRlZaclQ

Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third: > “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “ Those were some expensive words…

[flagged]

Re: FTX creditors will make money on bankruptcy

#43

Post by nroets »

flomo wrote: post #42
Scoundreller wrote: post #19

Earlier quoted context omitted.

Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third: > “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “ Those were some expensive words…

[flagged]

The buyers of these claims often have inside information.

By selling during bankruptcy they gambled that the "experts" were wrong and it turn out not to be the case.

That's why exchanges often suspend shares during bankruptcy: To make it clear that price manipulation and outright corruption is likely.

I have both a claim in FTX and shares in a suspended ("bankrupt") company listed outside the US. I just ride these things out because I don't need the money right now.

Re: FTX creditors will make money on bankruptcy

#44

Post by Scoundreller »

flomo wrote: post #42
Scoundreller wrote: post #19

Earlier quoted context omitted.

Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third: > “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “ Those were some expensive words…

[flagged]

From a public policy standpoint, you don't want local government authorities taking a quick buck now instead of (on average) more money a few years later.

But to an elected politician that might not even be in office in a few years, money now is worth more at any cost than money later.

A gov agency is best suited to ride these things out because their cost of capital is among the lowest. Generally dumb for a county to sell an asset to a hedge fund: the HF has to pay more in interest than a county does just to pay you money now. There's nothing to do here except wait, nothing to whip in shape and make more profitable.

(Also cities shouldn't own stadiums, that's a gamble on the success of your local sports team and solvency of whomever you sell the naming rights to)

Re: FTX creditors will make money on bankruptcy

#45

Post by [deleted] »

nroets wrote: post #43
flomo wrote: post #42

Earlier quoted context omitted.

[flagged]

The buyers of these claims often have inside information. By selling during bankruptcy they gambled that the "experts" were wrong and it turn out not to be the case. That's why exchanges often suspend shares during bankruptcy: To make it clear that price manipulation and outright corruption is likely. I have both a claim in FTX and shares in a suspended ("bankrupt") company listed outside the US. I just ride these th…

[deleted]

Re: FTX creditors will make money on bankruptcy

#46

Post by flomo »

Scoundreller wrote: post #44
flomo wrote: post #42

Earlier quoted context omitted.

[flagged]

From a public policy standpoint, you don't want local government authorities taking a quick buck now instead of (on average) more money a few years later. But to an elected politician that might not even be in office in a few years, money now is worth more at any cost than money later. A gov agency is best suited to ride these things out because their cost of capital is among the lowest. Generally dumb for a county t…

[flagged]

Re: FTX creditors will make money on bankruptcy

#47

Post by metaphor »

Scoundreller wrote: post #19
linotype wrote: post #2

The people that sold their stakes to people like Scott Galloway must be kicking themselves. Great trade. https://www.youtube.com/watch?v=TPFiRlZaclQ

Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third: > “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “ Those were some expensive words…

I fail to see how the decision was anything less than decisive prudence.

Your cited article makes it abundantly clear that the provenance of said $17 million claim was a default clause entitling Miami-Dade County to three years worth of naming-rights fees.

They sold that speculative claim for $5 million cash---effectively recovering that year's otherwise uncollectible receivables---then immediately turned around and locked in a 17-year, $117.4 million agreement with Kaseya[1]; back-of-the-envelope says that's an implied ~$5.4 million (2023 dollars) per year with 3% annual inflation adjustment baked in.

Call me naive, but I imagine that if you're in the business of running a multi-purpose arena with real opex, you've gotta be the dumbest risk manager in South Florida to allocate expensive legal resources in chase of speculative claims when a mutual opportunity to repair a gapping hole in your balance sheet presents itself and you have a willing long-term replacement suitor lined up.

[1] https://www.miamidade.gov/global/news-item.page?Mduid_news=n...

Re: FTX creditors will make money on bankruptcy

#48

Post by listenallyall »

FireBeyond wrote: post #25
Analemma_ wrote: post #6

Earlier quoted context omitted.

That's not how any of this works. If you steal money from the cash register to bet it all on black in Vegas, you're still going to jail even if you happen to hit and be able to return what you took.

That is, coincidentally, how we still have FedEx. Fred Smith taking the company's last $5K to Vegas and luckily winning $27,000. Mind you at that point, pilots were putting fuel on their personal credit cards, payroll had been bouncing for weeks. (Funnily, some people here think he did the right thing.)

Do you actually believe if paychecks were bouncing, pilots would be paying for fuel with their own money? Myths are kind of cool sometimes but let's stay within the boundaries of reality. I'm sure the blackjack story is highly exaggerated, probably also the story that his professor gave his business plan a failing grade.

Re: FTX creditors will make money on bankruptcy

#49

Post by flomo »

nroets wrote: post #43
flomo wrote: post #42

Earlier quoted context omitted.

[flagged]

The buyers of these claims often have inside information. By selling during bankruptcy they gambled that the "experts" were wrong and it turn out not to be the case. That's why exchanges often suspend shares during bankruptcy: To make it clear that price manipulation and outright corruption is likely. I have both a claim in FTX and shares in a suspended ("bankrupt") company listed outside the US. I just ride these th…

[flagged]

Re: FTX creditors will make money on bankruptcy

#50

Post by Scoundreller »

metaphor wrote: post #47
Scoundreller wrote: post #19

Earlier quoted context omitted.

Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third: > “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “ Those were some expensive words…

I fail to see how the decision was anything less than decisive prudence. Your cited article makes it abundantly clear that the provenance of said $17 million claim was a default clause entitling Miami-Dade County to three years worth of naming-rights fees. They sold that speculative claim for $5 million cash---effectively recovering that year's otherwise uncollectible receivables---then immediately turned around and…

The overarching question is: why should the County have thought the hedge funds are overpaying for the claim and to take the money and run?

Usually when you have several suitors that purely have profit in mind, you're the mark. Doubly so when their cost of capital is higher than your own.

> to allocate expensive legal resources in chase of speculative claims

On a claim this big, the bankruptcy trustee takes care of that for you. They're literally a fiduciary. The cost would be reading whatever gets mailed to you, but at the end of the day, there isn't much control you have over the ultimate outcome.

And uhhh, in terms of credit worthiness, Kaseya has an interesting history: https://en.wikipedia.org/wiki/Kaseya_VSA_ransomware_attack .

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