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points by cubefox 1 day ago | 0 comments

> 2002: Bankruptcy.

Why wasn't this the end?

Bankruptcy doesn't mean that assets will be destroyed. Valuable assets (including satellites, brand etc.) will be sold off to new owners, and the proceeds go to the lenders.

[–] laughing_man 1 day ago

That's what happened in Iridium's case. They created a new company, which bought all the assets for $25 million and the original entity defaulted on $1.5 billion in debt. The new company now does business with the original name.

It's the same thing that happened with the GM's 2009 bankruptcy. Technically the original company was liquidated, but you'd never know as a customer.

A family member made a big short bet on Iridium after he decided they couldn't survive and made a lot of money.

[–] cubefox 21 hours ago

Surprising that there was no other company which would have paid more than $25 million for those assets.

[–] piker 1 day ago

Two types of bankruptcy in the U.S.: liquidation and reorganization. The latter lets a company reshuffle assets and debt and schedule new payment plans to continue to exist as a going concern. It often wipes out shareholders.

[–] insane_dreamer 1 day ago

in the US corporate bankruptcy allows the company to restructure its debts.

case in point: the three largest airlines in the US have declared bankruptcy at some point: United, Delta, American