Lending to an illiquid credit....
....Picking up on your thought....
"keep in mind that anyone willing to collateralize that much of a loan by putting up their own assets is most likely smart enough to account for a rogue financier that may try to get their hands on the money he has earmarked to get the company to full production. .... In the end though, I am quite sure that the funds would be going into an account that would be safe, even if someone did get a judgment against CPRK."
...Could the new lender fund the loan in an account under his control, which is drawn on against specific items and disbursed by the lender (i.e., CPRK never actually gets possession of the funds, just has control over when and to whom money is disbursed)?
Or, would the now-defaulted-on creditors be able to somehow pierce this arrangement and suck out any money in such a "special account" under default actions?
If the answer to the first question is basically a "yes" and to the second basically a "no", then this might work. I know that if I were to consider such a loan, I would not do it unless I knew that the money would go for the intended purpose of getting operations going, and not for satisfaction of overdue financing payments.
PW, what do you say about this scheme ? Is this a normal method of lending to someone who is in distress with his existing creditors, or am I basically working from whole cloth here ?
M78
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