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Cool judge, so you gonna put up the cash? Because last I checked there were only two bidders and the victims wanted the Onion out of the two.
I've been following this closely.
The normal way bankruptcy auctions go is basically some version of this:
The judge is upset that the trustee didn't really do step 4, which in the bankruptcy process is designed to squeeze out the highest possible price for the sale. The losing bidder says they submitted a lower bid than their absolute top "best and final" they would have, because they thought they'd have an opportunity to improve the bid in a step that never happened.
So they're going back to do it again. Presumably the trustee will propose a new auction process that explicitly puts out well defined rules on how creditors (like the Sandy Hook families) can credit bid with credit against their own claims, instead of actual cash. They'll need to calculate exactly how much each dollar of credit bid brings to the non-participating creditors (like Sandy Hook families who don't want to credit bid), and make sure that for each creditor who isn't credit bidding gets the most money out of the sale.
I don't think it's over. The judge specifically said that he believes the trustee tried to do the right thing, but ultimately didn't follow a process that was designed to raise the most money.
Not only did they want them, the onion agreed to pay more to another lawsuit filed by a different group of parents than would have been given by the second bidder. This wasn't the highest amount bid, but the highest payout to families.
He thinks they didn't do enough to get more from the bidding. The point of this bankruptcy option is not to punish Jones, it's to liquidate his assets to pay creditors. The job of the person selling those assets is to get as much money as they can for those creditors.
So if the creditors stated they want the desk with the onion... Why not?
Law is 90% like process (number made-up). You need to follow the same process for everybody. You follow the same process and nobody sues later claiming "I was mistreated". This is an entirely reasonable decision by the judge.
But this is not what happened.
They are not telling the onion to offer more money, they are giving the one with the highest bid the chance to make it even bigger.
This is highly unusual to be honest. But it was unusual from the beginning.
No, the Jones-affiliated bidder had a smaller bid, but should've been given the opportunity to try to outbid the then-highest bid from the Onion.
Basically the judge said that the trustee, as auctioneer, should've gotten the two bidders into a bidding war to maximize the price.
The Jones one was the largest of the two, but the onion was favored by the families
The value of the Onion's bid was $7 million ($1.75 million in cash, $5.25 million in credit), when you include the credit bids from the families. That's where you're getting tripped up in trying to understand what the court was ruling.
No, there was no 5.25 in credit. I'm happy to see any source for that claim though.
There was some future payments promised and a better than usual split for some families, so they "valued" the bid at 7 million.
It's not future payments promised. Just a division of who to split the proceeds with. And so for the typical creditor who didn't credit bid, The Onion's bid was worth the equivalent of a $7 million cash bid, and therefore was more valuable than the Jones affiliates' $3.5 million cash bid.
It's just math. The Onion bid was higher, and the judge said that the losing bid should've been given an opportunity to improve the bid to get a chance to win, and maybe raise even more money.
That is exactly what counts as credit in this case, because this split is made possible by some other families crediting the bid. Basically writing "i dont want this money give it to someone else" on a figurative piece of paper and bidding with that instead of cash.
So even with that definition, there was no 7 millions anywhere. Thanks
It doesn't sound like that's happening - just that they should have known about what was happening more.
Honestly the reporting on this sucks. We'll need to wait for some legal commentators to weigh in on how unusual or standard this is and what happens next.
The reporting is OK, you need to read past the headline
Piss off? I read the rest of the article. In fact it says this:
That is a far cry from
they are giving the one with the highest bid the chance to make it even biggerby a long shot.So no need to be weirdly aggressive about my reading skills. The reporting so far is thin and being done by reporters who don't know the law enough about what happens next.