a) You were happy to settle, which sounds understandable. But when the stakes are $44bn and most actors on Twitter's side are but agents for Twitter shareholders, their chief concern will be not breaking their fiduciary duties if they accept anything less than the maximum amount they could get. It's a bit hard to imagine how the legal bills for seeing this through could stack up to even .1% of the purchase price ($440m), and that's nowhere close to the discount that Musk will be looking for (with good reason imho, btw).
b) In your case the other party might have gotten away with dodging a court order to pay (or at least made it appear like that). That's pretty much unfathomable if you are literally the richest man on earth and live in the US.
Let’s not forget the all the blather from Twitter board and leadership how their fiduciary duty was to not sell to Musk at this price.
Cramer even claimed the board would be personally liable for accepting the deal.
https://www.cnbc.com/2022/04/14/cramer-twitters-board-has-no...
"The SP 500 Index Out-performed Hedge Funds over the Last 10 Years. And It Wasn’t Even Close": https://www.aei.org/carpe-diem/the-sp-500-index-out-performe...
"How Smart Are the Smart Guys? A Unique View from Hedge Fund Stock Holdings" [PDF]: https://jgriffin.info/wp-content/uploads/2016/10/smart.pdf
"...Hedge funds exhibit no ability to time sectors or pick better stock styles. Surprisingly, we find only weak evidence of differential ability between hedge funds. Overall, our study raises serious questions about the perceived superior skill of hedge fund managers..."
Is there a source for this? I certainly didn't see it. They considered rejecting the offer, and quickly passed a poison pill provision, but that was about preventing buying the company on the open market instead of making a deal like this. The offer was initially only a very short note, and Twitter decided to sell within 3 days of financing being lined up.
https://www.sec.gov/Archives/edgar/data/0001418091/000119312...
That is 1%, not .1%
I'm pretty surprised musk seems to have put himself personally on the line, rather than putting 'musk acquisition project llc' as the party making the offer.
If it was the latter, then everything could be arranged so there was no money in that company to pay for any lawsuits. As the worlds richest man, dividing up your liability like that into many LLC's would seem like a very important thing to do.
Unfortunately for Musk, when an LLC is used as a proxy for the single member without real separation, the LL part stops working as anything but (on a matter this size) a small additional speedbump rather than a shield, at the same time, it's even nominal separation makes it harder to make deals than if your hoards of assets were behind them.
It is other way around. It is way easier for rich person to get away from dodging courts then poor one. Just the fact that rich person can pay fights and layers longer, and fact that rich has it easier to retaliate so everyone is more careful not to step on their toes or do mistake.
I’ll tell you that I didn’t know you could just say “no”, but they did. My lawyers were at the point that they would send a (legally backed) letter to all their customers, that their payments should be redirected to some court. It would have caused a massive hellfire, though.
I had the choice of going through with all this, but the outcome would still be uncertain, legal fees would increase, and take a long time regardless. It was a fully bootstrapped business, I was relatively young and in debt, and I decided to renegotiate.
In the end I got the money I needed to pay off my debts, legal fees + then some, a huge learning experience, and took a 1 year sabbatical. I just wanted this whole thing to be over.
A single verified unpaid bill is grounds for starting the bankruptcy procedure here so it is actually good tool to force big companies to pay. Though you can say goodbye to any future business relations with them if you do that.
https://www.gov.uk/wind-up-a-company-that-owes-you-money
"To wind up a company you must:
* be owed £750 or more * be able to prove that the company cannot pay you "
That's it.
In practice, yes an unpaid invoice, plus proof of delivery /service. Alternatively, a judgment from a court ordering them to pay.
So it's an absolutely nuclear debt collection option, and not fast. But the threat is real if the debtor can't argue the debt away.
It usually requires going back to court for the concrete thing to actually happen too; and it’s rarely all that catastrophic.
Judges are surprisingly willing to give folks more rope to hang themselves with later.
But this is taking it a bit far IMHO. It’s confusing to me at least that a court order is not final (“has not yet won legal power” as we say in Sweden), but can still be used to force payment through the authorities (Kronofogdemyndigheten).
It’s not THAT uncommon for some folks to just say ‘oh yeah, make me’, and while there are (usually) methods of doing it without their co-operation, it’s never easy.
The real slowness of the process kicks in when there are multiple parties claiming their money and there isn’t enough assets to pay everyone.
You’d have to show all that was the case for instance, which if they ignored you and generally were unco-operative would take awhile.
As I said it really only gets slow if the party does not have the money (as in they are bankrupt for real instead of just refusing to pay) and there are multiple parties claiming it. At that point it slows down to figure out how to split the assets.
There really isn’t any way to avoid this outside shutting down the company and moving the money out of the accounts but that will just dig the hole deeper as now they are not only contempt of court (not paying as ordered to when they are capable of) but they are also actively stealing/hiding someone else’s money.
Unpaid wages are usually treated very different from most claims, at least here, and do get handled in a very expeditious manner (labor commissioner in some places with literally raid workplaces sometimes).
Secured debt (pay me or I get this property - in the contract), can often get similar expedited treatment here in CA.
unpaid improvements (mechanics liens) on real or personal can get handled in a month or two here, but actually getting liquidated damages out of it can take a long time.
Other claims (general vendor bills, liquidated settlements), often meh.
https://www.washingtonpost.com/technology/2020/01/08/califor...
So it’s just you deciding not to go with this… for some reason.
I’m pretty sure if you enforced the ruling, you’d have gotten a quick response from them. It might seem like a dick move but they moved first.
At $44bn, I highly doubt the dudes of Twitter will take the same stance you took.
don't tell someone that you know more about a situation that they were in and you were not. A) it's freaking rude as hell, and B) you absolutely DO NOT have more awareness about this situation than the person who lived it.
Having said that, I wasn’t insulted by the parent, and they made a good point: my decision was based on pragmatism, and in the case of Twitter, this was much less likely to be the case. Since I decided to share my story in light of this whole Twitter debacle, the parent was right to point out that the comparison isn’t entirely correct, even more so when it’s about dozens of billions. The rules of the games are different there.
If twitter won and was in the position to compel performance, is that even in the best interest of the company? To force it upon an unwilling owner would be the best way to destroy it in very short order as they desperately attempt to recoup their costs.
Far more sensible, with an enforceable order in hand, to come up with a negotiated settlement. Far easier, as well, with a nuclear option.
An outsider can always offer a new perspective and they could be more knowledgeable than the person who went through the experience.
An outsider is just as likely to be an arrogant fool, and an arrogant fool is more likely to find skepticism offensive than a normal person. There are plenty of people, even on Hacker News, who assume that they are by default more knowledgeable than anybody else, and therefore are obliged to look at any given situation, opine, and set the record straight. Other people don't matter, and certainly their 'experiences' won't count. So, it's not surprising or offensive to run into the 'water squirt bottle of correction', where kitty gets unexpectedly hit with the message 'opining on experience you've never experienced disqualifies you as a first class advice giver'.
Chesterton's Fence is of course the idea that, if you encounter a fence and you don't know what it's for, you don't take it down until you do know what the fence was for. People tend to get worked up about the things they see that, to them, seem to be there for no reason, and advocate all the more vigorously for removing such things when to them, the existence of the thing is obvious nonsense with no possible justification… they would rather think that a thing was done by a total fool who's so inferior to them as to be hopelessly incapable, than consider the idea that their superiority might be questionable.
I've learnt not to critique other peoples designs without a full understanding. The designer probably would have changed a few things if they had a second attempt. Unknown and usually silly requirements can play a big part in design that you as an outsider are unaware of. I've learnt to assume competence rather than incompetence. At the time, there was likely a very good reason for such a decision.
In the same vein as “never attribute to malice that which is adequately explained by stupidity”, “never attribute to engineering that which is adequately explained by finance” :)
It's more like someone coming upon their neighbor complaining about a mutual neighbor and their fence and offering them advice for the next confrontation with the neighbor.
Who do you think had the best perspective on the situation? The person who went through the litigation, had lawyers, knew all the details of the case and made the decision of the poster sending a canned five lines reply based on a paragraph?
It does take much awareness to realise that sending an abrasive reply when you are in no position to do so might be ill received by the community (well at least the quickly diminishing part who wants to have an interesting discussion).
The parent definitely was factual and correct, but the tone made it sound a bit as if they thought my reasons for doing so were incorrect. That would be a bit of a stretch, and I think that’s what was bothering @naikrovek
If the outsider is making general claims about similar sorts of situations, then sure. If they're predicting the behavior of someone unknown to them, but well known to the OP, then not so much.
A good coach has zero impact on their players that actually experience the game?
He went through the paperwork, and 6 months later they wrote him a cashiers check right then and there when he showed up with the Sheriff to take possession of one of their prized historic artifacts from the lobby of their corporate headquarters during business hours.
Not very many people are able and willing to deal with the shittiness of all the paperwork required, and a lot of bad actors count on that.
either the company pays up (in whole or in installments, etc) or the enter into bankruptcy proceedings and the courts appoint someone. if the company is profitable, then as above it'll eventually pay up, if not, then it'll be sold off and the liabilities will be covered up to by the income of the sale.
Like: The courts say pay, and the company says no. So you...
- ...send police (not really the jurisdiction of the police, but let’s pretend they go). The police show up and say “Give us the money you owe” and the business says no. Now what? They can’t go on to private property without permission or warrant. Dead end.
- ... become your own collections company. You call them as much as you are legally allowed, and ask them for the money. Each time they say no. You call their family (you might not be allowed to do this) and they say “not my problem” so they are dead ends. You call their vendors and clients but all you are doing is informing them that company X owes you money. They don’t have any obligation to give you that money.
- ... sell the debt to a collections company. That company gives you pennies on the dollar (20% if you’re lucky).
- ... work through the courts to garnish wages. You have no idea what this company pays their staff for wages, nor who to target (the exec who said no?), but you push forward anyway and end up getting that garnishment. You now get 30% of everything that person makes. Let’s call that 30k/yr at the time of the garnishment. Then, that person quits or takes a “lower-paying job” and you’re down to 10k/yr. It will take decades to get what’s owed to you and in the mean time this person is actively battling you in court because they hate losing 30% of what they make every month.
- ... pursue action that gives you a percentage of the company’s net revenue. If you get it, you can only celebrate for what feels like a moment because they could have a “sudden increase in expenses” or choose to close the business and start a new one with a different name. You can try to get the agreement shifted to that new company, but that’s a whole new challenge and the whole time the founders are saying “No.” “Not our responsibility.” and so on.
It’s really very hard to get cash in hand from anyone, whether there is a court ruling or not.
yes using a collections company is the fastest way, but here the cost is less than 10%.
and it's not that hard in case of mortgage defaults in the US either (foreclosure is completely routine). oh and there was a story of a dude who won some claims against some bank, the branch was either clueless or forgot to pay, so eventually the dude went to the branch office and packed up some of their furniture. (which is of course less routine)
the way it works here is that if the company doesn't pay upon the court order they automatically enter into bankruptcy and the court appoints someone to manage the company during. so they can't just suddenly "increase expenses"
When my now-adult son was in high school, he had a summer job working as a moving man for a friend's dad's company. The company had a contract with the local constable's office. One of my son's and his friend's assignments was to drive a truck around to the offices of a very-big shopping mall and to meet a constable to collect a seven-figure court judgment that hadn't been paid. The constable, my son, and his friend walked into the management office; the constable presented the writ of execution of the judgment, and my son and his friend started unplugging and loading up office equipment and furniture to be hauled off and sold at auction. The manager said "Wait, wait"; a hour later, a cashier's check arrived for the amount of the judgment.
yeah, that’s like totally reasonable. I’ve done similar back in the ‘80s, using a similar process seized bank accounts when the former employer ignored an order to pay a judgement over unpaid expenses. Notably they didn’t bother to appear in court in the first place; they never responded to service even though I paid extra to have the Sheriff’s Deputy serve it. Then they ignored my calls and letters for several weeks. I knew all the bank account numbers already, so: back to the judge for an order to seize the accounts. Showed up at the bank an hour later with the deputy in tow and walked out with a bank check for roughly $45k 30 minutes later.
Nowadays a bank makes you wait some days for a payout but they will freeze the funds immediately.
These days I prefer lawyering up, but in the late ‘70s I called on a supplier to deliver promised equipment that was being delayed because well, I was a teen-ager and even though I had paid they felt like I wasn’t a serious customer. So I paid a local motorcycle club $500 to escort me to the meeting, as well as sit there in the parking lot revving engines and scratching off whilst I met with the vendor. The MC got a hefty tip because: members helped load the product, and the MC president encouraged a 50% refund made out to me personally to ensure I would never have to be a customer again...
When it comes to court battles, relative depth matters.
Not that bar isn't very high, we are possibly talking about millions or tens of millions in billings, but either side have that and it will make sense for both to spend it in every case.
Delaware courts are known for dealing with these sorts of cases rapidly - there isn't likely to be any opportunity for dragging it out for years.
I realise Elon is a bigger fish but he is a highly leveraged and constrained one…if anyone has more insight into this dynamic I’d interested to hear it
https://www.macrotrends.net/stocks/charts/TWTR/twitter/cash-...
The court will appoint someone else to go trough his assets and find a way to pay. Selling Tesla stocks for example.
It appears they will make around $6B in annual revenues, I think their financial performance is better than most social media platforms, save FB. In what way, Twitter is not in good shape?
This is not the story of some happless kid swindled by a brown ice cream vendor. This is a sophisticated business person who has, prior to signing a legally enforceable contract to buy the brown icecream as-is, talked publicly about how the ice cream is just brown and not chocolate.
Why did the buyer made that contract to be written and then signed it? The potential buyer of the brown ice cream was not taken seriously initially. Everyone, including the seller, assumed that he is going to flake out and not go through with the transaction. The buyer has seen that he is not taken seriously, but he really really wanted to own the brown ice cream at that time. So the two parties willingly went into a written agreement that the buyer is going to pay a lot of money for the brown ice cream. Since the seller had concerns about the flakyness of the buyer, they both instructed their lawyers to write the contract as ironclad as possible. And what gives teeth to contracts like that, is that they can be enforced through the court system.
Because they agreed to buy it? And because you stand to make a lot of money. Doesn't seem that complicated to me.
How isn't this win-win? Musk gets a company for a price he considered acceptable. It's the same company. It's the same price. How was this win-win before when he made the agreement, but not win-win now?
> When you force people against their will, wtf business practice.
Against their will? He made an agreement to buy it. Does canceling the agreement against Twitter's will somehow not matter at all?
> What is the good thing to celebrate about that ? Also when selling companies, employee depend on that. You cannot have an owner who is hostile to your employees. The new owners become hostile because they are not financed enough (because they didn't want the deal), or because the board was hostile and forced the take-over.
If Musk really no longer wants Twitter and wants to reach an amicable resolution, he could start by offering $44 billion minus the current market value of Twitter. Twitter might very well accept that or something close to that. Then Musk wouldn't need to own something he doesn't want, but Twitter would still roughly be getting the overall value agreed upon with Musk.
Nobody gets to the point where they either have significant control over Twitter or have the money to buy Twitter by being ethical.
An ethical person would not have signed an agreement to almost definitely buy Twitter, intentionally giving up several common buyers’ rights on this sort of thing, and then spend the next month and a half trying to get out of it.
Assume positive intent and work ethically and in good faith, but if they clearly demonstrate to you that they don't have positive intent, you don't need to be a punching bag.
Also, letting them renege on the deal they agreed to would likely put you in a worse situation than had they not offered the (bad, for them) deal in the first place, making it harder to feel bad for them.
Ultimately, if a business made a binding agreement, letting them out of it to be nice is nice, but neither required nor financially sensible.
I ended up suing them, won on all counts, and the deal had to go through.
Unfortunately, this company simply refused to do that even after the judge ruled against them, and I had to renegotiate the terms set by the judge.
That was one hell of a ride.
Point being, if Musk really doesn’t want it, even if Twitter wins a lawsuit, Musk will probably find another way to postpone or renegotiate or whatever. In the meantime, Twitter is not in a good shape, and this whole thing is probably hurting them so much more than that they could possibly benefit from.