So selling the assets was a better option than filing chapter 11 this summer/fall?
8 replies (most recent on top)
@Lqls2Jz-1quq if KK is puppet why he himself don't go out due to self-respect.
They were waiting TruMp to come in
Few guesses that could have taken time..
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They actually did not want to go for chapter 11 and were waiting for a good deal and that got delayed....
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The negotiation between the creditor and silver lake took time
The key now is what is the restructuring plan going to be! The devil is in the details:)
It is not a good thing but not the end of the world for now. all the ex-Nortel types will be cringing when they hear the "business as usual" line. Really just spin but the company will keep running
The person continuously claiming to have talked to Pat lawless or is Pat Lawless on this site, is in fact not Pat Lawless.
Chapter 11 can't be good for any creditors include the banks/investment companies that lend Silver Lake money to buy Avaya. During chapter 11, there will be no payment to any creditors so they want to get out of this as soon as possible
This is mainly a power play between Silver Lake and the creditors. They will fight for debt/equity swap, to either get rid of all or part of the debts and becoming the owners with the banks likely will have the majority of the shares. As a majority owner they can call the shots upon exiting Chapter 11 on the business decision or selling of the company. Silver Lake and their buddy KK will be swept aside post chapter 11 you can bet on that.
Right now, Silver Lake controls the shot and decision to monetize part of the company as long as they can satisfy the debt/interest payment which they can really do pre-Chapter 11. Some of the deals fell through were probably because Silver Lake stand to lose a lot more on the fee and balked the sales.
Employees on the other hands, especially the ones in the U.S will be the losers in Chapter 11. The company can decide on a restructure plan (to be approved by court of course)_ by reducing the labor cost (as claim so they can be successful emerging from Chapter 11) . This means massive layoffs without having to pay much in severance or benefits due to the labor of non-union employees. You might be lucky that they will give you 2 weeks termination notice and walk you out of the door. The employees of course can claim for their money in court but it would be an unsecured claim and they would be at the bottom of the list of creditors.
As for non-US affilications, due to labor law in certain countries (ie: Canada), they will almost certain be instructed to stay the claim and pay so there is no point in filing Chapter 11 with those countries.
This can't be business as usual. It will be a bloody mess as it will be aired out in court and the struggle to take over between formerly friends. KK is basically a master puppet in this whoe proceeding. He's most likely will be forced out.
Because the management team do not get a bonus for putting the business into chapt 11 a sale would have earned them a nice bonus.