Anytime insiders get any “out-of-pattern” payments within a few years before a filing, creditors can go after those dollars. The theory is that management and owners took cash for themselves then left the creditors holding the bag. This may help, but I’m sure there is plenty out there if you want to pursue the topic. Search on “bankruptcy claw back” or “bankruptcy preference”
Great post. Perhaps start-ups should be looking to funds like Softbank that are hands-off, have plenty of cash, and seem to want to chase deals. In the whole saga, Softbank was the enabler and is as guilty as Neumann. I have done a lot of restructurings and messy situations like this one, and the only explanation I have for Neumann walking away with hundreds of millions is that he had something on Softbank that Softbank did not want to leak out. All of his employment agreements and other deals would have been wiped away in any other situation. But the story is not over for Neumann. Given the bankruptcy, he is at-risk for a claw back on his exit package.
Anytime insiders get any “out-of-pattern” payments within a few years before a filing, creditors can go after those dollars. The theory is that management and owners took cash for themselves then left the creditors holding the bag. This may help, but I’m sure there is plenty out there if you want to pursue the topic. Search on “bankruptcy claw back” or “bankruptcy preference”
https://www.romanolaw.com/disputes/preference-claims-in-bankruptcy/#:~:text=A%20preference%20claim%20is%20brought,%E2%80%9Cclaw%2Dback%E2%80%9D%20claims.
Great post. Perhaps start-ups should be looking to funds like Softbank that are hands-off, have plenty of cash, and seem to want to chase deals. In the whole saga, Softbank was the enabler and is as guilty as Neumann. I have done a lot of restructurings and messy situations like this one, and the only explanation I have for Neumann walking away with hundreds of millions is that he had something on Softbank that Softbank did not want to leak out. All of his employment agreements and other deals would have been wiped away in any other situation. But the story is not over for Neumann. Given the bankruptcy, he is at-risk for a claw back on his exit package.