Comments on: Scarcity of Debtor-in-Possession Financing Forcing Earlier Bankruptcy Filings http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession.html Sun, 22 Nov 2009 04:39:16 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession.html#comment-29212 Anonymous Sun, 14 Dec 2008 07:28:00 +0000 http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession-financing-forcing-earlier-bankruptcy-filings/#comment-29212 Thanks for sharing your thoughts on this. This may explain why GM is so fearful of Chapter 11 - because it will only result in a Chapter 9 exit. Thanks for sharing your thoughts on this. This may explain why GM is so fearful of Chapter 11 – because it will only result in a Chapter 9 exit.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession.html#comment-29148 Anonymous Sat, 13 Dec 2008 17:58:00 +0000 http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession-financing-forcing-earlier-bankruptcy-filings/#comment-29148 The bankrupt financial system should be nationalized, a la the Swedish method, and the culpable board of directors, management, equity and debt holders be made to rightly pay for the corrupt and dangerous actions of Wall Street bankers. The bankrupt financial system should be nationalized, a la the Swedish method, and the culpable board of directors, management, equity and debt holders be made to rightly pay for the corrupt and dangerous actions of Wall Street bankers.

]]> By: realty-based lawyer http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession.html#comment-29133 realty-based lawyer Sat, 13 Dec 2008 14:48:00 +0000 http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession-financing-forcing-earlier-bankruptcy-filings/#comment-29133 Yves,<br/><br/>Very astute (and unfortunately uncommon) comment on the changed incentives of lenders. A hedge fund or CLO that's hedged its risk by buying protection on the debt has a very different attitude to working out a problem. The potential gain on a Credit Event is designed to equal (and, depending on structure and the choice of deliverable or protocol obligation may exceed) the potential loss on the debt, for a lot less work, in a lot less time and with a complete exit from a troubled risk. Why should they help work things out? Yves,

Very astute (and unfortunately uncommon) comment on the changed incentives of lenders. A hedge fund or CLO that’s hedged its risk by buying protection on the debt has a very different attitude to working out a problem. The potential gain on a Credit Event is designed to equal (and, depending on structure and the choice of deliverable or protocol obligation may exceed) the potential loss on the debt, for a lot less work, in a lot less time and with a complete exit from a troubled risk. Why should they help work things out?

]]> By: Anonymous http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession.html#comment-29132 Anonymous Sat, 13 Dec 2008 14:43:00 +0000 http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession-financing-forcing-earlier-bankruptcy-filings/#comment-29132 nationalization was and remains the only option. The longer we defer that option the worse things are going to get. All this stealth nationalization is just making the problem worse. <br/><br/>As an aside I believe we are reaping the consequences of fierce partisanship in politics. Where the obvious solution is not adopted (not because the policy makers are not smart enough to identify it) but because what their respective bases will think of it. nationalization was and remains the only option. The longer we defer that option the worse things are going to get. All this stealth nationalization is just making the problem worse.

As an aside I believe we are reaping the consequences of fierce partisanship in politics. Where the obvious solution is not adopted (not because the policy makers are not smart enough to identify it) but because what their respective bases will think of it.

]]> By: mmckinl http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession.html#comment-29109 mmckinl Sat, 13 Dec 2008 07:43:00 +0000 http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession-financing-forcing-earlier-bankruptcy-filings/#comment-29109 <b>So ... When do nationalize the banks and impose a Swedish Plan or do what FDR did? </b><br/><br/>Until we clean up the banks balance sheets the situation in DIP, Student Loan, Commercial Paper, Inventory, Accounts Receivable, LOC and other financing will only get worse. <br/><br/>Bernanke, as a student of the Great Depression can hardly claim he's never heard of FDR's Bank Holiday.<br/><br/>Obama had better well consider his fate should he not clean up the banks. All those political contributions from Wall Street will not unfreeze the credit markets. With frozen credit markets Obama will preside over an economic disaster no matter the size of his stimulus package. So … When do nationalize the banks and impose a Swedish Plan or do what FDR did?

Until we clean up the banks balance sheets the situation in DIP, Student Loan, Commercial Paper, Inventory, Accounts Receivable, LOC and other financing will only get worse.

Bernanke, as a student of the Great Depression can hardly claim he’s never heard of FDR’s Bank Holiday.

Obama had better well consider his fate should he not clean up the banks. All those political contributions from Wall Street will not unfreeze the credit markets. With frozen credit markets Obama will preside over an economic disaster no matter the size of his stimulus package.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession.html#comment-29108 Anonymous Sat, 13 Dec 2008 07:08:00 +0000 http://www.nakedcapitalism.com/2008/12/scarcity-of-debtor-in-possession-financing-forcing-earlier-bankruptcy-filings/#comment-29108 Power and greed are like drug addictions.<br/><br/>Wonder how many will reinvest in stupidity? Power and greed are like drug addictions.

Wonder how many will reinvest in stupidity?

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