Toys R' Us files for chapter 11 bankruptcy.

[SecondWar]

bonzobanana said:

SecondWar said:

I hope you never get into the habit of lending people money, you'd seriously be your own worst enemy.Thought for that very reason I'd be surprised if you did.

I get the impression you think the process is corrupt by nature, which its not. However abuse and manipulate it to their own ends - both borrowers and lenders. From the borrowers side, companies have been known to pile up on excessive debt and then default in bankruptcy, effectively increasing the owners wealth whilst screwing the lenders. These aren't always banks, often they are suppliers - many of which can be much smaller companies that toys r us, and not getting paid and cripple and bankrupt them aswell. Think about that.

I'm not quite sure what your point is but my point was that when you restructure debt and creditors get only a percentage of what they are owed they clearly lose out but for the employees who work there and customers who like the stores its more positive. However I think there is a corruption in takeovers where the takeover is paid for by loans or creditors which is then added to the debt of the company itself often under the premise that the company taking over will run the company better. If they don't do a much better job of managing the company, it is even more indebted and less likely to survive long term even if the core business is profitable which I believe is the case and history of Toys R Us. The company that managed the takeover often walks away with huge profits whatever happens due to making themselves isolated from the debt of the company.

Think I must have been in a mood when I wrote that as its got a more combative tone than I remember.

As to my point, when you said it was a good thing, I'd interpreted it as you saying it was good that all the creditors would lose out, which could have plenty of unforeseen consequences.