From: Tim May <tcmay@got.net>
Date: Thu, 17 Dec 1998 05:06:25 +0800
To: Robert Hettinga <cypherpunks@Algebra.COM>
Subject: Re: DigiCash Update, part II
In-Reply-To: <004d01be28a9$64561620$0401010a@luckylaptop.c2.net>
Message-ID: <v03130317b29dbeae5c0d@[209.66.101.206]>
MIME-Version: 1.0
Content-Type: text/plain



At 8:22 AM -0800 12/16/98, Robert Hettinga wrote:

>Well, okay, to be fair, there *is* another way to do this, too, since DigiCash
>is a private company currently in the lap of a bankruptcy trustee. It's pretty
>simple, really. Just buy up the outstanding debt that caused DigiCash to file
>Chapter 11 in the first place and hold out until Scott & Co. forks over the
>company.
...
>Presto-chango, you get the same result without making the headlines.

The bankruptcy laws simply don't work this way. At least not in the U.S. My
understanding is that the current instance of Digicash is a fully
U.S.-based company.

Those holding debts, secured or unsecured, don't have the company or its
patents "forked over to them."

If a company is ultimately liquidated the physical plant, furnishing,
equipment, bank accounts (if any), patents, and (sometimes) "good will" are
sold. Proceeds then go to the various debt holders according to their class
of debt.

The debt holders _may_ have side deals, contractually arranged, which give
them rights of first refusal on certain patents or assets. But not usually.

So, buying the debt of a company facing liquidation guarantees almost
nothing about gaining access to patents. Someone who has no debt interest
in the company may well end up outbidding others for assets, including
patents.

This is just basic business stuff. I'm an investor in

About the wisdom of announcing a takeover publically I'll say nothing.

--Tim May

Y2K -- LMGALMAO -- Loading my guns and laughing my ass off
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   831-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
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