>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.
> 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.
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.
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.
>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.
> 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).
You are absolutely correct. Matt Levine wrote about this topic in his newsletter the other day. Well worth subscribing if corporate/legal shenanigans interest you.
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 $501M, then the one who was owed less would be stealing from the one who was owed more. The fact that neither of them has any actual money is another very troublesome point on its own, as is the fact that the bidding was completely private. There might have been someone willing to pay 10x the winning bid for InfoWars in actual cash and been out of the loop.
Put it in any other context. Do you think a bank would issue a loan whose repayment was contingent on income from an individual who was seeking relief in bankruptcy? Obviously they would not. The court has an obligation to not accept fugazi money to buy real assets.
My understanding is that the other (minor) creditors would get more cash in the Onion offer because the Sandy hook reps weren’t going to take their huge cut in the event their preferred bid was accepted. That means in any other deal, the other creditors would be strictly worse off. The families would be financially worse off but they were the ones driving the decision, so they clearly felt holistically better off.
I don’t see how they shouldn’t be able to take less money themselves as long as the other creditors also got more money.
> Isn't it telling that the same judge said it was done improperly? Trustees have an obligation to follow standard practices which maximize cash flow or at least don't give the appearance of impropriety.
This is incorrect - trustees have an obligation to maximize the benefit to debtors. You'll see common examples of non-monetary benefit when it comes to wills - a cabinet that may be valued at 150$ but has immense sentimental value may be given to inheritors even if there is a 200k bid on it if that is what the beneficiaries all agree to.
You are treating debt discharging too literally like a numbers game - there are other important factors and in this case all the debtors were aligned and would have clearly preferred the deal with the lower monetary value.
>This is incorrect - trustees have an obligation to maximize the benefit to debtors. You'll see common examples of non-monetary benefit when it comes to wills - a cabinet that may be valued at 150$ but has immense sentimental value may be given to inheritors even if there is a 200k bid on it if that is what the beneficiaries all agree to.
Probate court is different from bankruptcy court. You can only do something nonstandard if all creditors agree. Some of these creditors are almost certainly banks that are owed money by AJ.
>You are treating debt discharging too literally like a numbers game - there are other important factors and in this case all the debtors were aligned and would have clearly preferred the deal with the lower monetary value.
There are very few sentimental factors in bankruptcy. The few that do apply (such as protections of property with little value) exist to benefit the debtor and not the creditors.
Even if they all did agree, which I don't believe, someone might want to buy the business for a fair price using real cash. That counts for more than fantasy debt that is going away anyway. These processes exist for legitimate reasons no matter how you feel about it.
Said someone had the opportunity to participate in the auction - only two participants chose to do so. The auction was clearly announced and while there was a rule change midway through (which is what this whole kerfuffle is about) both participants agreed to the rule change.
> 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
No, that's not the _only_ fair way. Suppose the $2B creditor bids $200M in cash and also agrees to forfeit their share of the proceeds from the sale. Then the $1B creditor would receive the entire $200M, which is more than the $167M they would have received from a $500M cash sale. The bid is effectively equivalent to $600M.
Isn't that what happened in the InfoWars case? The bankruptcy judge agreed that the structure of the Onion's bid was valid; he just said the auction would have continued for more rounds.
>>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.
Except what if all the creditors prefer that outcome to the "more cash" outcome? If the way it would get divvied up is $499m to you and $1m to me, vs $350m to you and $50m to me (but you get some other benefit that you prefer), why shouldn't that be accepted?
If literally every creditor agreed, maybe so. But I don't think that is the case even among the subset of creditors that is the families. If there are banks involved I'm sure they aren't interested in getting less money.
The two groups of families are the only two creditors. The Connecticut families are owed ~$1bil, the Texas families are owed ~$50mil. Nobody else is getting any money.
The bid that was accepted would give the Texas families more than they would have gotten from the other bid, because the Connecticut families were willing to give it to them, because they valued stripping Jones of his platform higher than the cash.
The only people worse off are the people who submitted the losing bid (Alex Jones' cronies). The creditors, and the estate, were not. And they're the ones the bankruptcy Trustee has the highest duty to.
It is impossible to infer this simply from the size of the debt. Debts have seniority ordering which dictates who gets paid first, just like liquidation preferences in startups.
Sorry, I was imprecise (and not meaning that it was due to the size of the debt alone).
There are 3 sets of creditors that have potential claims in these proceedings, based on what I can find. The two groups of plaintiffs from the different trials (Connecticut families and Texas families, although there's at least one FBI agent that's part of one of those cases too) and American Express - Jones owes them ~$150k in credit card debt. AmEx is not pushing for this money, for obvious reasons (they wouldn't get it, and it would look bad).
No one in this case is disputing that the money is going to end up with the Sandy Hook families. It's entirely the other bidder in the auction that took this back to the judge.
Did that for pens while employed as a pizza delivery driver nearly two decades ago. Customers would regularly sign for a credit card receipt with my pen, hand back the signed receipt, receive pizza, and somewhere in the object-management process wind up still holding the pen. The cheapest pens were like 8 cents each at Costco, so it literally wasn't worth my time to try to make sure my pen made it back to me.
Under the law, the rightful owner of stolen property can demand its return. If it's currently installed in your phone, that's your problem, even if you bought it "fair and square" - that just gives you a claim on the merchant who sold you stolen goods.
The exception to this is currency: if you're fairly paid with stolen money, you get to keep the money, regardless of whether the rightful owner is able to proof that it was originally theirs and stolen.
Which law is that now? As I'm sure an expert like you knows, this will vary by jurisdiction.
The fact that somebody may take a replevin claim against me because the digitizer in my phone was removed from their stolen phone does not, imho, have any bearing on Apple's rights and responsibilities with regard to me as a customer.
People have a strong and well-founded attachment to nominal values in the economy. You pay your rent or mortgage with a fixed quantity of dollars, so as a salaried employee certain pay cuts are intolerable, so employers balance their falling nominal revenues with layoffs instead of pay cuts.
These nominal agreements are significantly less flexible than real-valued ones; people are much more able to buy fewer steak dinners when they're $20 instead of $15, and much less able to stay in their house when their paycheck is $1500 instead of $2000.
Every nominal asset that can be sold to take advantage of lower prices on goods and services is someone else's nominal liability that they have to cover with weakened earning power. Deflation is straight up bad compared to mild and predictable inflation, it's easy to fight off sure but it's definitely something to avoid.
You don't even need to run it as a tunnel the entire way through - Chesapeake Bay has vehicular traffic routed through a combination bridge/tunnel, using tunnels to span the two major shipping channels crossed by the complex.
Nuclear fission is relatively straightforward so long as you either don't know or don't care about the health risks of radiation. It's just a pile of spicy rocks at the end of the day.
Fusion, on the other hand, requires you to get center-of-sun temperatures and pressures going on to work properly. That usually requires either extremely difficult engineering processes or a fission bomb (and more precise engineering calculations but they're actually reasonably solvable).
I don't know about easy, but hundreds of people have accomplished this as a hobby project using the Farnsworth design, including a handful of very disciplined teenagers.
I always thought fusion was easier than fission, since all* you really need is water and electricity — the problem being that it's currently impossible to get more energy than what you put in
* I am eliding over the fact that building a Farnsworth fusor is still a challenge, but less of a challenge than sourcing, purifying, and enriching uranium certainly.
If you just want any reactions then fission is still way easier, you get more fission from a random bit of uranium ore or in some cases even a banana than from a fusor.
Nuclear fission includes radiative decay, what makes a nuclear reactor rather than a bomb or pile of rock is becoming self sustaining where the reaction is driving the reaction. Fusor’s don’t get there, ITER will as the energy from fusion is driving more fusion reactions.
It’s the difference between rotting wood and a fire.
> But I do have the impression that copyright is kept as long as it is not signed over.
The US has the "work for hire" concept - if an employee creates work as part of their regular duties, their employer is considered both the author and the copyright owner.
For example, if you have employees take photographs of finished products, using company devices, on company time, and as part of their assigned duties, there is essentially zero question that the copyright owner of those photographs is the employer, regardless of whether this is explicitly lined out in an employment agreement.
The employment agreement definitely helps in that it preempts most disputes over what the employer's expectations are, but it is by no means necessary.
It's mostly a distinction without much difference. In jurisdictions were copyright is non-transferable, it will always be with the natural person who created the work. But all these jurisdictions allow transferring exclusive rights of use, so that's what happens instead.
If you want to get really technical, something like "Copyright (c) 2024 CompanyName SE" is literally impossible by the letter of the law in these jurisdictions. Courts of course understand that this is meant to be shorthand for "The exclusive rights to use this work authored in 2024 by an unnamed party are with CompanyName SE".
Unlikely to be legal - you aren't authorized to delete software in use on company computers (regardless of whether management currently knows it is in use), and the software you wrote is likely a "work for hire" done during work hours in the course of your duties (again, regardless of whether management currently knows about the software and how it gets used by front-line workers).
The correct way to handle this is to get ahold of the CTO or a relevant subordinate in their department, and inform them of the shadow-IT situation going on at the warehouse. Most risk-adverse IT executives would have a conniption at the idea that work policies are enacted by business logic code that zero employees understand and can modify.
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.