Posted on 03/28/2019 4:11:53 AM PDT by ConservativeStatement
Were these planes, office space, maintenance space, or buildings and infrastructure paid for and solvent? Are their employees and contractors still owed moneys? including the coming law suits? Did they take out any loans? Are there any taxes owed? They all get what’s left first. The bondholders will get the table scraps if any. :)
THIS is why I never invested in bonds.
I'll start with a disclaimer - I have no idea what law would govern - likely either Icelandic or EU. The bondholders appear to EU entities. While I'm good at US bankruptcy law, I'll confess only very general knowledge of British law on the subject, and none of EU (or Icelandic) law.
That being said - I doubt that the company had any assets free and clear except perhaps some office supplies - pens, paper, staplers, etc. Perhaps some tools for low level maintenance. The buildings and hangers are likely rented, the planes either leased or subject to secured senior debt instruments. The employees will likely have limited priority claims to cash, if any. Credit card companies will be freezing anything they can to cover the chargebacks. Contractors may have some mechanics and materials liens that the secured parties may have to pay off.
I saw in one story that they have rented out one of their planes. That may be generating some cash, but whoever holds the paper on that plane should be able to grab most of that.
As for 'coming lawsuits' - why would anyone sue? It's not like the unsecured creditors are likely to have anything to fight over anyway.
If you have collateral and a senior lein at some point you need to cut your losses and go after it before it depreciates for the benefit of others. If you are unsecured, you want those in line ahead of you to take a haircut so you get something. It's the junior secureds that have to make hard decisions.
Yes.
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