Don’t get yourself banned now.
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How does this actually work? Can anyone explain it?Originally posted by Impactfour View Post
If they're ditching debt, who gets stuck with that debt not being paid? Why doesn't the company owner get stuck with it?Comment
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Chapter 11 basically they wil take possession of Valken corporate assets to pay off his lenders as much as possible but if 1) the company has little to no assets then the lenders have to eat it, pretty much.
Business failure isn't illegal. And the system still benefits, otherwise people would be too risk averse to attempt business ventures. And the banks still make a ton of profit from lending even with bankruptcies. (Business and personal bankruptcies, both.) -
I got confused and thought you were commenting on your own post for a second. Matrix this, martix that...
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Also during a "business" bankruptcy, i should mention, they dont go after the personal assets of the owner. They go after the company's assets. Any cash left on accounts, or actual things owned by the company including manufacturing equipment or leftover inventory. A trustee gets assigned to each bankruptcy case by the government to oversee everything and he is an "impartial" party between the debtor and the lenders. The amount of money owed almost always dictates how aggressive the trustee will be in making sure no "funny" business occured, like a business officer or owner using company funds for personal stuff, or any accounting funny business that diverted company dollars to private accounts or for private use. so its not all black & white. It's a case by case. And also hard to prove, because what constitutes profits/income and what constitutes a company's operating lent capital? things can get very messy very quickly, and unless it's a huge amount of money owed, they wont bother wasting resources in accountants to investigate.Originally posted by martix_agent View Post
Fraud cases during bankruptcies are extremely rare but they can certainly happen. Or at the very least if they can prove that a business owner or officer used company funds to buy a new corvette, lets say as an example: they can go after that car.Comment
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Man, and Gino is going through cancer treatment right nowComment
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So I got my dad's opinion today. I would have time type out his thoughts and analysis, but I think it would be beyond the bandwidth of MCB in terms of the character limit. He actually worked with Ciardi & Ciardi before and is familiar with their styling/methods.
He has two major thoughts:
1) The affidavit is funny, usually in that document you goal is to describe the plan to escape debt as a company and swear to his validity. Instead Gino filed a bunch of motions that describe the plan, as well as other relevant facts, and stated in the affidavit that he'd take the stand and swear to their validity of the plan described in the motion, as well as the other pertinent facts.
2) This part I probably won't translate as well. Apparently Gino also loaned money to Valken and did so after the bankruptcy filing in an unsecured manner. The part that matters is that as a result Gino technically needs to be paid back by Valken before the banks/lenders. Essentially this gives him a ton of leverage. The lenders can either choose to liquidate and try to sell his assets to make back their money (good fucking luck) or allow him to continue operating, most likely taking some long term deal in which he pays them back a portion of what is owed by continuing to operate.
His best guess is that they will negotiate the debt down, and Valken will continue to operate, and he's pretty damn good at what he does
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I believe the banks would have to agree to be a subordinated lien position. Most won’t agree to do this, unless they financed something post Gino financing. Even then, most won’t agree to do this. The other thing is, if they did obtain more debt (from Gino) without being informed and agreeing to being in a 2nd (or even 3rd) lien position, then they would trigger an event of default in most cases from the bank, and the bank would have right to remedy. Long story short- doubt Gino gets all of his money
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Maybe it's because I don't really understand what is happening, but the business world sounds excessively shady in how things operate; this seems like a prime example of it.Originally posted by Impactfour View PostComment
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Completely, I have a super rough understanding of it all, but 90% of the time it sounds like mafia style practices. When my dad explained the bit about Gino making an investment that needs to be paid back before any of his debts I asked him isn't he just holding their debt hostage by doing that and he just replied "legally".
That's really how all this stuff seems to work. My dads been involved in cases with companies as big as Nike and incidents like the Fyre Festival, in both cases representing the smaller parties, there are so many legal financial managers that just sound like crime with extra steps and parties involved.
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Bankruptcies are at an all time high since the pandemic. Not just business bankruptcies, all bankruptcies. You have a lot of inflation these past few years, now tariffs, a lot of companies are filing. And it's not criminal or anything of the sort. It's simply mathematics. Even companies that did everything right, are facing all kinds of head winds which unfortunately they will not survive. And paintball has always been a very small market.
But that's basically the difference between a Ch. 7 & and a Ch 11: Under a Chapter 7 bankruptcy, the business closes its doors and its assets are sold off to pay its creditors. In a Chapter 11 bankruptcy, the company may continue to operate under court supervision.
...bankruptcies play an important role in the economy. Overall, it is positive for the economy to give individuals and business a second chance, or a chance to restructure and rescue a failing company. (As long as there's no fraud involved.)
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The court documents showing the amount of debt they are in were leaked, and it's gnarly. In the millions.Comment
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My dad and I looked over those docs over the weekend, he seemed convinced that it was an amount he could overcome particularly with the post bankruptcy investment Gino made.
In the world of business bankruptcies, millions are nothing, especially with the size of many of his lenders. It will all come down to Ginos ability to present a business model that gets them out of debt without too much of a credit line. Odds are the debtors aren't interested in claiming and auctioning off the assets Valken has, given how niche they are, particularly given that Gino has positioned it so his investment will be paid back before anyone else essentially.
Take this all with a grain of sand, I'm just a boat captain with a dad who's a business lawyer specializing in bankruptcies. 90% of what he was saying went over my head, but I mostly recall the summary he gave me on July 4th while we were drinking....
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How far in the millions? Because 2 million for a company their size is a very different story than 200 millionOriginally posted by iamthelazerviking View Post
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Yet again? I figured with him gabbling up market share like he did he wouldn't go this route again. Low and behold... I guess things don't change.Comment
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