8 ms·
Read a bit and wasn't sure of the exact nature of the 700k loss, but if he somehow got access to all that credit without the assets to back it it, it would seem
by binarysolo 6y ago
Read a bit and wasn't sure of the exact nature of the 700k loss, but if he somehow got access to all that credit without the assets to back it it, it would seem like people can form a pact, where person A gets credit and bets X on a thing, person B bets the counterparty -X, have X be comically large, one person gets the payoff while the other declares bankrupcty, and basically "gain X/2 for enduring bankruptcy". (We can have some variation to sweeten the pot, where the losing person gains X/2+C, winner gains X/2-C, where C= some additional money to deal with bankruptcy hassles.)
Presumably this doesn't actually happen since it's doable, so I'd be curious what -700k losses practically means.
- jboydyhacker 6y agoThis bargain exists already- it's called a hedge fund.
- gizmo686 6y agoThis sounds like fraud. Person A would have an asset worth X/2, in the form of his contract with person B. When A declares bankruptcy, his X/2 would be used to partially pay his debtors. This only way this scheme works is if A conceals this during the bancrupty. For comically large X, you can expect to have a team of lawyers and forensic accountants look through your books. If they catch on, you get nothing except a potential fraud conviction.
- binarysolo 6y agoYeah, that makes sense - for a simple scheme like this I'm sure there's some expectation you can't just go around abusing bankruptcy like this.
- AlEinstein 6y agohttps://news.ycombinator.com/item?id=23523517 https://news.ycombinator.com/item?id=23523517