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TheNakedGun

05/08/21 11:09 AM

#375355 RE: Poor Man - #375342

It could say that they were not willing to let the company go at that point. Or it could say that they thought it was the best way to get cash into the company at that time. And as they are running the company, they know they will be able to make sure that this guarantee will never come into play.

LP and LG did lend money to the company in the past. So why not guaranteeing a loan from a third party?
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biosectinvestor

05/08/21 11:46 AM

#375370 RE: Poor Man - #375342

Nobody does a guaranty in that manner. I am not saying it has never been done in the annals of corporate history in the United States ever. It’s just not generally something that is a common practice or that is generally done for any reason. Even when you have deep pocketed backers. And in fact it would be a sign of weakness if they had to do that, provide personal guarantees, in my view. I do not think any large institutional financial firm would view that as a positive. For a general real estate loan sure. They like to have people on the line, and for a private equity company, maybe. But not for a public equity this far in its corporate life. Questions would be raised as to why a financier had so little confidence. It would not fly as you guys think it would in my opinion.