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Posted On: 01/15/2022 12:34:15 PM
Post# of 154134
Talking with my Treasurer's hat on.
We don't know whether NSF guaranteed Amarex's liabilities.
But we do know NSF paid some amount of money for the company, putting the purchase price on their balance sheet as an asset and expecting some return over time for their investment.
If Amarex is bankrupted, the creditors own what remains (assuming a Sidley-quality firm continues as our lawyer). They can operate it or liquidate it.
For NSF, their balance-sheet asset is written off to zero and those future returns don't happen. That's why NSF might well ante up towards a settlement even if they haven't guaranteed Amarex's obligations.
In the 1990's, I had to threaten to liquidate a tiny subsidiary of our holding company to force a bizarre lawsuit to a reasonable compromise.
We don't know whether NSF guaranteed Amarex's liabilities.
But we do know NSF paid some amount of money for the company, putting the purchase price on their balance sheet as an asset and expecting some return over time for their investment.
If Amarex is bankrupted, the creditors own what remains (assuming a Sidley-quality firm continues as our lawyer). They can operate it or liquidate it.
For NSF, their balance-sheet asset is written off to zero and those future returns don't happen. That's why NSF might well ante up towards a settlement even if they haven't guaranteed Amarex's obligations.
In the 1990's, I had to threaten to liquidate a tiny subsidiary of our holding company to force a bizarre lawsuit to a reasonable compromise.
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