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Comment by shanebellone | Hacker News Reader

If Twitter went bankrupt, could Elon buy its intellectual property at auction for a discount to effectively reduce his acquisition price? Or is the majority of debt tied to Musk personally?

I'm not a Musk fan but if this play is in the cards, his actions could be rational.

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I dont know how it works but there must be some way to prevent that.

Otherwise poeple would just

- buy 51 % stake - run the company into the ground - announce its bankrupt - at the auction buy back IP for pennies on the dollar - start new company with previous IP, same domain name, same servers etc

Also if there was an auction, what prevents Google, Meta, MS, Amazon, etc from buying the IP instead.

https://en.wikipedia.org/wiki/Corporate_raid

I could be missing some details here, but when he bought it and took it private, doesn't he already technically own all of Twitter's IP? So he would crash his company to buy back his own IP from himself at a discounted rate?

If the business failed, IP would be sold to satisfy creditors. If you bought a widget for $100, but financed $50 of the purchase, you've effectively spent $50. If you then go bankrupt, buy that something back at auction for $10, you've reduced your cost from $100 ($50 + $50 of debt) to $60 ($50 + $10) after defaulting on the debt.

Gotcha, that makes a lot of sense then. Thank you!

Creditors should have the right to any assets, including any IP.

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