Joe Moldovan Quoted on Process if Twitter Files for Chapter 11

Joe Moldovan was quoted in a February 25 Insider Business article entitled “Elon Musk Said He Had to 'Save Twitter from Bankruptcy.' Here's What Would Happen If It Filed for Chapter 11.” The article details what could happen if Twitter’s costs are not as “under control” as Musk has claimed, and the company files for Chapter 11. While a court-supervised bankruptcy would require that secured lenders like banks are repaid first, leaving equity holders at risk of losing the value of their equity, Joe stated that “equity doesn't always get wiped out, and my guess is there would be a whole variety of deals made” by Musk to preserve his ownership stake.

Since Musk’s purchase took the company private, the likelihood of Twitter restructuring is harder to glean, but Joe explained that the signs could come from earnings statements by banks reporting the value of debt they hold. He said, "One of the things you need to watch is, how are the banks marking these debts? If the banks mark down the value of loans, it means there's some possibility they're not going to get fully repaid” and restructuring discussions could be underway.

Read the article here.