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Judge Rejects Sale of Infowars to The Onion
(www.nytimes.com)
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this post was submitted on 11 Dec 2024
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Apparently they also did not allow follow-up bids/outbidding others. It’s called a bankruptcy auction for a reason.
And there's a trustee for a reason. The debtors decided that the value of keeping Alex Jones away from InfoWars had its own value and were willing to accept a lower bid. There's no fiduciary duty to maximize the proceeds from the sale, and Alex buying back his own assets during a bankruptcy auction is actual fraud.
A first price sealed bid auction is a perfectly common type of auction.
It's functionally equivalent to an auction where you know the value of a thing (like we do a business being liquidated because the owner is in extremely deep unrelated legal debt), and the auctioneer starts by asking for the face value and then progressively lowers the ask until the first person accepts the price.
Instead of trying to get the lowest price possible, people are incentivised to start with their best offer for what they actually think the thing is valued. Allowing follow-up bids encourages people to low-ball and work their way up, which can reduce the price the seller gets for the item.
https://www.investopedia.com/terms/s/sealed-bid-auction.asp
Common in bankruptcy as well?
No idea, and not entirely sure why it matters. If your goal is to sell an asset and maximize proceeds, it's a known and unsurprising strategy, particularly since it gives higher returns when there are few bidders.
I think it has quite a chance of mattering. There's two choices here: the judge is incomptetent/compromised, or there's a reason this makes sense within the bankruptcy context. I want to explore the latter first before I make any judgements.
The underlying reason for the bankruptcy is bigger than dollars. Avoiding selling infowars to some other conservative shitheads to continue the harassment of Sandy Hook victims is far more important than dollar signs.
This was not a typical bankruptcy auction, and part of the trustee’s role was to ensure an outcome that was acceptable to those injured by Jones, eg the Sandy Hook families.
https://en.wikipedia.org/wiki/Vickrey_auction
There are numerous formats of auction. I don't think a Vickrey auction is what they did, but it is an example of a sealed auction format that is well supported as legitimately and efficiently maximizing value for the seller.