I am surprised that you seem surprised by this tactic, or perhaps that it seems to be unknown to many. Way over here in Canada it was common when I was a young lawyer in the 1970s and 80s.
There was also the double screwing sometimes administered by the management, including directors, of public companies. They saw the smash coming, saw the hidden value of the business, and sometimes, not always, arranged a bankruptcy with a bent or gullible trustee. Before that happened they had financing in place to buy the hulk and did so, promptly, convincing judges that speed of administration was for the best.
It was not even a breach of fiduciary duties - they usually sent out plenty of notices and warnings which naturally depressed share prices and got rid of annoying large shareholders. They also loudly expressed enthusiasm for the prospects of the business so their subsequent purchase could not be called surprising. Overly enthusiastic honesty as a weapon, what could be better.
Hartlepool Council recently bought a shopping centre from Mars Pension Trustees. I wish the Councillors who approved or allowed this had read and understood this analysis.
I am surprised that you seem surprised by this tactic, or perhaps that it seems to be unknown to many. Way over here in Canada it was common when I was a young lawyer in the 1970s and 80s.
There was also the double screwing sometimes administered by the management, including directors, of public companies. They saw the smash coming, saw the hidden value of the business, and sometimes, not always, arranged a bankruptcy with a bent or gullible trustee. Before that happened they had financing in place to buy the hulk and did so, promptly, convincing judges that speed of administration was for the best.
It was not even a breach of fiduciary duties - they usually sent out plenty of notices and warnings which naturally depressed share prices and got rid of annoying large shareholders. They also loudly expressed enthusiasm for the prospects of the business so their subsequent purchase could not be called surprising. Overly enthusiastic honesty as a weapon, what could be better.
Hartlepool Council recently bought a shopping centre from Mars Pension Trustees. I wish the Councillors who approved or allowed this had read and understood this analysis.
Great article, thank you
I wonder how many local councils, having purchased various retail sites only about eight, ten years ago, are now on the receiving end of this.
Silly fuckers.