Tag Archives: bankruptcy

Did Fuld make a mistake putting his Florida house out of reach of his creditors?

This guy thinks he did, because it will give the prosecutors something to hang their hat on.Perfectly legal, but looks bad. I don’t agree. It seems to me that Fuld’s lawyers have assessed the chances of a prosecution and calculated that they are far less than the chances of huge civil suits which hold the possibility of draining even Dick Fuld’s bank accounts. If that assessment is right, it makes sense to shield whatever assets you can. Dick, I hereby volunteer to buy the North Street property for $100. I’ll live in it until all this is over and 10 years from now, sell it back to you (for fair market value, which might, in ten years, be more than $100).

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A cautionary tale for cash-strapped builders?

Circuit City is being liquidated, at a loss of 30,000 jobs and every penny of stockholder equity. This is the idiot company that fired all its tech-savvy employees and replaced them with minimum wage workers, the better to drive customers away, so its collapse is hardly a surprise. The same genius CEO who devised the “abandon all knowledge” staffing plan rejected a private equity offer of $17 per share in the beginning of 2005. It reminds me of the spec builder who last year refused a bid of $7 million for his unsellable North Street project in January, only to be forced to sell it for $4.5 later that summer. At least his lenders recovered some of their investment – I suspect that, as this year progresses, lenders are going to look more and more like Circuit City shareholders. Ouch.

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