Quote:
Originally Posted by borg23
Let's say my friend owed me 10k.
COVID hits and it renders me unemployed with kids etc.
I borrow 30k from him.
Am I really gonna be like hey you owe me 10k first?
Hell no even though technically if be right.
If I'm dealing with some bank I'd be technical but not with a friend..
Dwan probably should have paid 225 k first but if you're Jetten and you then dump 1.6 mil of your friends money are you seriously gonna be like hey you owe me 225k?
The other stuff he seems scummy on but the Jetten stuff I get his point.
Apples and oranges.
Jetten doesn’t ‘owe’ Tom $1.6m. He owes Tom $1.6m of makeup. Totally different things.
Tom can do whatever he wants with Jetten’s makeup. He can continue backing Jetten (unlikely), and if he wins, Tom gets in all until the makeup is cleared (ignoring alternative makeup deals to simplify things).
Tom could choose to sell Jetten’s $1.6m of makeup to someone else. Sounds like Tom values that debt at around .25 to the dollar, so $400k. If someone buys Jetten’s makeup off Tom for $400k, then starts backing Jetten, then Jetten needs to pay that guy $1.6m before he collects.
I’m guessing Jetten’s $1.6m is probably valued at less than $400k, but there must be some point at which it’s +EV to buy it up. Like, I’d buy it for $5.
Maybe Tom should ‘sell ‘ Jetten’s $1.6m to Bob at a value of $200k. Bob deducts $200k from whatever Tom owes him, Tom pays Jetten, then Bob makes a new arrangement with Jetten.
Knowing Bob’s luck, Jetten immediately ships a high roller, clears the makeup, and Bob throws another $1.6m onto the pile.
That’s the answer.
TLDR: The $1.6m of makeup is an asset Tom owns. But that has nothing to do with the debt he owes Peter. Your analogy is flawed.
Also, ‘technically’ you’d be wrong. If your friend owed you $10k, then gave you $30k, then he paid off his debt already, and now you owe him $20k.