Category Archives: bankruptcy

Ecuador Craziness Datapoint of the Day

Today is clearly "crazy things people try to do while in default on their debt" day. First Friendfinder Networks tries to IPO, and now Ecuador is trying to borrow more money: Ecuador is seeking $2.6 billion in credits from regional … Continue reading

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Broken Glass

Is Waterford Wedgwood luxury, or "masstige"? Either way, it’s bust. Its $625 million in debt is essentially worthless, it’s been losing money before interest payments for a couple of years now, and its prospects, as we enter another grim year … Continue reading

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What Does GMAC’s Bond-Exchange Failure Mean for Detroit?

The GMAC bond-exchange results are out, and the screws that GMAC applied on December 10 — tender your bonds or we won’t become a bank or get TARP funds — seem to have had some effect, with the percentage of … Continue reading

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This is Not Good

The WSJ reports that talks to save the automakers have broken down in the Senate, and that there will be no bailout. Once again, Congressional Republicans have killed an intiative backed by both the White House and the Democrats — … Continue reading

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The GMAC Game of Chicken

The NYT does a good job today of explaining what’s going on at GMAC, although it doesn’t quantify the haircut that the company is asking bondholders to accept; my commenters put it in the 10% range, which seems roughly right. … Continue reading

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How Can GM Bondholders be Bailed In?

Is a bankruptcy for GM not only an option, now, but a necessity? At least one of Bloomberg’s interviewees thinks so: The Democrats’ goal of preserving a U.S. auto industry is not doable without a bankruptcy, said Lynn LoPucki, who … Continue reading

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How a Bankrupt GM Should Merge With Chrysler

Yesterday I sketched out a possible financial plan for how GM might be restructured within bankruptcy. Today, Andrew Ross Sorkin provides the other side of the coin — the operational side of things. Which, in his plan, includes a merger … Continue reading

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GM: An Alternative to Bankruptcy

Antony Currie says that it’s possible to structure a GM bailout so that it behaves like a bankruptcy without being called a bankruptcy: If an official bankruptcy label is really too scary, another template already exists: the government bailout of … Continue reading

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Bailout vs Bankruptcy, Obama Edition

Barack Obama addressed the GM situation on 60 Minutes last night: Mr. Obama: My hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure … Continue reading

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GM: The Bailout vs Bankruptcy Meme

There’s a bailout vs bankruptcy meme going around with regard to GM — a choice which makes me want to tick "none of the above". I’ve seen it in dozens of places of late, but since it comes with the … Continue reading

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Driven to Bankruptcy

Do you know anybody who bought a new car in October? Most of the country was a little bit preoccupied, I think, for that kind of activity. But even so, the news that GM sold just 168,719 cars last month … Continue reading

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Does Bankruptcy Save Jobs?

Remember all those pictures of dejected Lehman bankers walking out of their offices with cardboard boxes full of personal possessions? Well, it seems they might have acted rather prematurely. In fact, there seems to be a good chance that there … Continue reading

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Did Lehman Brothers Steal $8 Billion?

My Lehman story from last week has finally been picked up by the WSJ: Lehman moved more than $8 billion between Lehman’s European headquarters in London and New York, where Lehman collects money from its global units and then disperses … Continue reading

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A Lehman Story

It’s clear now that the European and Asian operations of Lehman Brothers will be liquidated and not sold as a going concern. Barclays clearly doesn’t want them, and at this point they’re like bread or fish: getting staler and less … Continue reading

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Lehman: No Chapter 7, Yet

As expected, Lehman Brothers has filed for bankruptcy. But in a twist, the brokerage subsidiaries haven’t: Late Sunday night, Lehman said it intends to file for protection under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy … Continue reading

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Lehman: Is Bankruptcy an Option?

Henry Blodget says that Lehman declaring bankruptcy would be a "sensible solution" to its current predicament: A bankruptcy filing would put the company in the hands of a court appointed liquidator, which would take years to sell off everything. This … Continue reading

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Creditor Rights, Risk Aversion, and Justice

A paper from Viral Acharya, Yakov Amihud, and Lubomir Litov shows something which makes a lot of intuitive sense: if you beef up creditor rights, you beef up corporate risk-aversion — and that can be bad for growth. They conclude: … Continue reading

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Why GM Should Embrace Bankruptcy

Tom Krisher has a good overview of the travails at General Motors, where the stock is trading at a 50-year low, battered by speculation that the company might end up declaring bankruptcy. Bankruptcy actually seems like a very good idea … Continue reading

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Credit Derivatives Datapoint of the Day

Isda: The notional amount outstanding of credit default swaps (CDS) grew 37 percent to $62.2 trillion in the second half of 2007 from $45.5 trillion at mid-year. CDS notional growth for the whole of 2007 was 81 percent from $34.5 … Continue reading

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How Holdbacks Brought Down Frontier Airlines

On Friday I got a bit confused about something called credit card holdbacks, and how they could be used to drive an airline into bankruptcy. It turns out that it all goes back to something known as the Fair Credit … Continue reading

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