-----BEGIN PGP SIGNED MESSAGE----- At 2:55 PM -0500 on 12/16/98, Tim May wrote:
The bankruptcy laws simply don't work this way. At least not in the U.S.
Actually, Tim, they do. And, frankly, what an amazingly silly thing to say. A day doesn't go by when debt-holders don't convert to common, or are asked to do so, bankruptcy or not, and take over what's left of a corporation like DigiCash. Frequently, debtholders are the people in the strongest position to do so, and the trustee agrees. Almost all bank mergers happen that way, for instance, and a patent's as good an asset as a bank deposit, especially if it's earning revenue, like DigiCash's are, however small that revenue might be. Actually auctioning off a company's assets doesn't happen nearly much as the Small Business Adminstration -- or whoever your sources are -- say they do. Mergers are usually the rule. Look at PGP, if you want a pointer. Cybercash will probably be sold, someday, debts and all, and probably for the amount of their debt, which, by now, I bet, is as considerable as DigiCash's. So, indeed, if partners of the caliber Lucky is boasting he has went out and bought up the debt of DigiCash, it would take about a heartbeat and a half before Loftesness, or even the bankruptcy trustee, would offer them stock, if not control, just to take the company out of Chapter 11. Or, more likely, to merge it with a more solvent business. To think otherwise, is, frankly, a complete betrayal of your cluelessness on the subject, Tim, and I don't use that word lightly in your regard.
If a company is ultimately liquidated the physical plant, furnishing, equipment, bank accounts (if any), patents, and (sometimes) "good will" are sold. Proceeds then go to the various debt holders according to their class of debt.
Right. If it gets that far. Usually, it doesn't. In the case of DigiCash, it might, except for one rather obvious thing. They still have outstanding revenue from the likes of DeutcheBank, Nomura, and a few other rather large financial institutions. That means that the patents, at the very least, are worth something on the books, and probably *won't* be sold at auction unless everything else fails. Frankly, converting all the outstanding debt to common would be the cheapest thing to do, and you could bet that if Loftesness could do it, he would. Finally, if all that doesn't work, there's still the possibility of buying the patents at graveside, like you, and, frankly, I, were talking about, but, given the capital market's thorough disfavor for internet transaction protocols these days, the patents are probably not worth much to any of the "players" Lucky says he has, especially in the modern world of hockey-stick internet IPO's and VC-induced investment bubbles. So, outside of their residual remaining royalties :-), the patents *might* be worth something to some financial crypto labs, and to the internet crypto community at large, but that's about it, which was why I'm trying to put together a syndicate to backstop whatever Loftesness tries to do to get DigiCash back on it's feet. To be blunt, nobody has *proven* that they're worth anything else but research curiosity, so far. And, until the debts on DigiCash are taken off the books (by stock-for-debt swap, or outright buyout, or whatever), we're not going to find out anytime soon.
The debt holders _may_ have side deals, contractually arranged, which give them rights of first refusal on certain patents or assets. But not usually.
More properly, DigiCash's debts may, in fact, *be* secured by the patents themselves. In which case, the debtholders *do* get the patents. Given the quality of the outstanding debtholders, (most of whom *are* VC folks, if I remember what I've heard) I expect that if it were at all possible to collateralize the debt with the patents, they would have done so. Of course, we'll find out the real answers to all of this when the Chapter 11 filing is actually final. Right now, I hear that there's nothing there but a placeholder filing, with no actual assets listed in detail, much less whether they're secured by anything.
So, buying the debt of a company facing liquidation guarantees almost nothing about gaining access to patents.
Nonsense. Utter, complete, absolute -- and, clueless -- nonsense. See above.
Someone who has no debt interest in the company may well end up outbidding others for assets, including patents.
Sure. Except, of course, when the judge turns the debtholders into controlling shareholders instead. Go read up on a few actual bankruptcy cases, Tim. It might help you state your case better if you used actual data.
This is just basic business stuff. I'm an investor in
<and so forth...> Yes, I know, Tim. You "know" <drop a name here>, and *I'm* no <dropped name here>, and so on, and yes, we all know, you're a tycoon of massive renown. A giant unsold position in Intel, which you have now retired early on, to a fortress out in the thules somewhere, proves you must be such. Of course, Tim, if you really were clueful about business as you say you are (instead of just a commendably frugal case of being exactly the right employee at the right time), *and* you cared about making blind signatures ubiquitous, you, the man who taught us all how important they were to begin with, could have probably *bought* the patent yourself, probably for a song, at least once when they were up for grabs in the last few years. And you might even made money on them, being so clueful in business, of course. :-/. I even expect that you could even buy those pantents now, all by yourself, if you could remove yourself from your Barcolounger, except for the odd trip to the shooting range, to buy a new stereo, or to wait for the millenium. Yelling insults at the local gendarmarie as they drive by your Y2K-proof stone-by-stone replica of Wolf's Lair, challenging them to come and shoot you out, copper, doesn't exactly help, either, I suppose. If you thought financial privacy was so important, you, personally, Tim, could have done something about this, a long time ago. All by yourself, without anyone else. And you didn't. Instead, you snipe. Oh, well. Cypherpunks now ride Barcoloungers, I suppose. Frankly -- if I may step aside the point of the thread, here -- since you started this chicken-little, off-the-pig, shoot-the-"criminals", Junior-Birdman militia kick, you're just plain boring, Tim. Tireder than Wired, you are. Which is a real drag to lots of folks who are still here, because you really had a lot to say once. You taught everyone here most of the way they think about the world, in fact. Double that for all the people who've left the list already in the wake of your recent thermite infatuation. Nowadays, though, I remember a very sad, but funny, Firesign Theater takeoff on 'Desiderata' which seems to sum you up pretty well. It said something like '...you're a fluke of the Universe, and, while you're sitting there, looking stupid, the Universe is laughing behind your back'. That is, you pop off with the occasional "kill the bastards", or the occasional "pearl" of business wisdom like the above, and we'd laugh, except that you're no funnier than any other incontinent old gentleman, yelling at the local skatepunks trashing his flowerbeds. Or minefields. Or whatever.
About the wisdom of announcing a takeover publically I'll say nothing.
That's nice. Glad to hear such a well-founded opinion. Except, of course, that that's the way it's usually done, Tim. People raise their money, they get their partners signed up into a legal arrangement of some kind, they hoist the Jolly Roger if necessary, and they make a tender offer. In public. No veiled intimations of a "Secret Santa", somewhere in the wings, come to save the day. Transactions, for the most part, are based on reputation, or have you forgotten that as well? And, yes, Tim, I actually do know how it's done. I've seen it. I've been right there, albiet with an extremely junior clerk's-eye view, and almost two decades of hindsight. :-). Certainly, close enough to know when someone isn't blowing smoke, which is what I'm increasingly convinced I see, here, so far. And, sadly, what's really more important here, is that I now know you *haven't* seen this kind of thing done, Tim, and you don't know any more about what you've been saying about mergers, or bankruptcy, than what you've read in the papers. If you read the papers at all anymore, that is. So, to return to the point, here, if anyone's going to make a run at DigiCash, they should do something, or, to fracture some scatology, get off the pot. They should not go stomping around public mailing lists saying the equivalent of, "I have secret partners and we have secret plans, and we're going to free the blind signature patent for all to use". So, please, give me a break. About the "secret santa" bit, anyway. It would be very nice indeed to pry the blind signature patent out from the beached, debt-ridden carcass that DigiCash has now become, :-), and I think that it's going to happen sooner or later. Whether a bunch of cypherpunks, with or without Timothy C. May, will ride up in a cloud of dust and save the day remains, of course, to be seen. Frankly, I'd rather expect that the financial crypto community will step up to the plate, here, but we'll see. And, so, with the above, -- and now final, as far as I'm concerned -- pile of, well, clueless dreck, from you, Tim, I've reached an amazing decision. Something I never thought would happen, even with all the excrement you've heaped in my, and other people's, general direction over the years. To paraphrase the joke about the optimist child at the Christmas tree, there was usually a pony in mess somewhere. But, with this, it has finally happened, Tim. Welcome to *my* killfile. Given the quality of your contributions to this cypherpunks lately, I expect that I won't miss you very much, and that is a very sorry shame indeed. Cheers, Robert Hettinga -----BEGIN PGP SIGNATURE----- Version: PGP for Personal Privacy 5.5.5 iQEVAwUBNnhNrcUCGwxmWcHhAQEqygf/a6Ml50SqXJHfWxWrHFI4AfzSleL7bGzZ laKlUP3sl7HcDz43D58gMZmFJblYO/1cucj4VoK8SL1+EqiqE/3DH3G4yCSAbaFO YaaJ3W9V1xVdxoSk9alWPN0kQfLdSJeF+CZsGqCorhhDXIAqm6X4z86B7IZLDltG KaY3ENxomCE64fM6PZRBplz4dRW14K8OrxbshPoR07Lg4sjMCG8hUzHHq2uq+VcL CrPWtrHYynWSCZagKUHZeWekm1QxheZssYcTG4kar7NHq76wooLexWkmC8lGhDpu gVDL1wtnzlqBkDKa22M6x98sHBOwC56gfkeExPwGaRFHqcU6fUYPuw== =6xeW -----END PGP SIGNATURE----- ----------------- Robert A. Hettinga <mailto: rah@philodox.com> Philodox Financial Technology Evangelism <http://www.philodox.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'