Deadbird

I stopped studying bankruptcy law 18 years ago. I am not an attorney. Still, I think the gross outlines of Chapter 11 are still in place.

Twitter, or what is left of it, will be in Chapter 11 in a month or two, thanks to three of its largest creditors. The court will pay professionals to scrutinize the company and find out what its assets and liabilities are. Then the Trustee will determine whether the company can be made to work and emerge from Chapter 11 under new management. I am certain that Musk will be no part of it. Or, he will say the company is DOA, and the only way out is to liquidate Twitter. And here’s the interesting part. Because Musk is the face of Twitter, and he is the alter ego of the company, the court can “pierce the corporate veil” and use Musk’s own assets to satisfy the creditors. These assets mainly consist of shares of Tesla and SpaceX. If they are liquidated, the share prices of these two companies would plummet due to a loss of investor confidence. In turn, this would further diminish Musk’s fortune.He will probably be left with a few billion, chump change. I can only imagine the good he might have done with all that money – global healthcare for all, a preferential option for the poor. But, no. Mr. Musk will have the fanciest lawyers, and he may emerge able to found another company without impediment. May the Almighty forbid it.

Current BK practitioners, what do you think?

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.