[zanek]

Levandowski just filed for bankruptcy saying he has less than $100M in assets . Does anyone know if he will only pay a percentage or is only delaying this by kicking the can down the road to another court ? I would be highly surprised if his employer (Uber) shouldered any of the this

[tomerico]

I wonder how he doesn't have more assets after he sold his company to Uber for $680 millions

[rockinghigh]

1) He did not own 100% of that company. 2) There were 4 cofounders and 90 employees. 3) He got paid mostly in Uber shares that vested over time and he left before they vested.

https://www.cnbc.com/2017/12/14/ieee-analysis-shows-uber-pai...

[tomerico]

Good link. It looks like half of the purchase price was supposed to go to Anthony, but under a vesting schedule.

[specular]

Very difficult to answer this with specificity, but in general there are a number of factors that influence the amount of cash you ultimately net from a sale, including:

- Cap table: what % is owed to other founders, investors, employees, etc?

- The total acquisition price may include substantial legal and other fees that will lower the actual amount received by the owners or shareholders.

- How much of the acquisition is financed through cash vs. equity? Equity may vest over a certain time period, and be subject to certain requirements (your sustained performance, ability to clear legal scrutiny, etc.).

- Taxes.

Taking all of this (and probably more) into consideration, it doesn't seem unreasonable for a founder to ultimately net <10% of the total sale price. Again, this is all wild speculation in this particular case.

[loeg]

His company existed for a seven months in 2016 before being bought by Uber. It isn't clear (to me) if there were third party investors or what the cap table was, broadly. Purportedly 90 employees at time of sale to Uber.

[tmh79]

his contract to sell w uber had a significant earn out, the 680m was based on hitting different tech milestones. He hit none of them before he was fired.

[tomp]

Why would you ever “sell” a company under such conditions? “We pay you $1T if you write a simple loop in the next two days.” Next day when you come to work: “Fired LOL. Do not cross Start, do not collect $1T.”

[glangdale]

While this is a crazy example, I have been in very similar kind of position (not $1T for a loop, though) and been worried about the strong motivation to get rid of me on certain N+364 day timelines. It didn't happen and I was treated quite honorably. I think if you want your acquisitions to go well, you don't do cheesy stuff like firing people to save money (when the integration is otherwise going quite well) or else your future acquisitions will be harder. People talk.

[dodobirdlord]

Usually you don't agree to contracts that let you be fired for the sorts of things that don't end up with you in court. Buyers, being reasonable, refuse to sign contracts where they can't fire you for being a criminal.

[scarejunba]

Because that's a trick that only works once for the buyer so you know they're not going to pull it. It may not even work that one time because you'll tie them up in court.

[loeg]

Ah, that's some important detail I was missing. Thanks.

[ivanvanderbyl]

I don't know what the CGT situation is in America, but in Australia of you own an asset (shares, property, etc) for less than 12 months before sale, capital gains tax kicks up to about 50%.

[daemin]

Australian here as well.

If you own things and sell them for a capital loss you get a tax credit to use later.

If you sell for a capital gain within 12 months then you will pay tax on the full amount of profit from the sale. For individuals this is just added to your income tax.

If you sell for a capital gain having held the asset for over 12 months you get a 50% discount to how much profit is taxed.

The tax credit for a capital loss can be used to offset a capital gain but it gets applied before any discount is applied.

I am not an accountant but I have listened to one.

[loeg]

That sounds essentially similar to the US system except that the US long-term capital gains tax rates are not exactly 50% of income rates. They're 0% of income rates on the low end, approximately 53-68% in most of the middle tax brackets, and 64% at the high end.

[jonathankoren]

Typically you have to hold assets for a year for them to be taxed as capital gains. Otherwise it's just normal income, which caps out at 37%. Capital gains maximum rate is 20%.

[bretpiatt]

37% for Federal plus State tax and CA taxes cap gains, both short and long the same. Very possible to end up at ~50% rate in CA.

[loeg]

Pedantically, the max cap gains rate is 23.8% with NIIT. (Also, these are the federal tax brackets; states can and mostly do impose additional taxes on both income and capital gains.)

[TheSpiceIsLife]

Australian here.

That doesn’t sound right.

CGT operates by treating net capital gains as taxable income in the tax year in which an asset is sold or otherwise disposed of. If an asset is held for at least 1 year then any gain is first discounted by 50% for individual taxpayers, or by 33.3% for superannuation funds. Capital losses can be offset against capital gains. Net capital losses in a tax year cannot be offset against normal income, but may be carried forward indefinitely.

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

Maybe the 50% your thinking of come from this?

For most CGT events, your capital gain is the difference between your capital proceeds and the cost base of your CGT asset. (The cost base of a CGT asset is largely what you paid for it, together with some other costs associated with acquiring, holding and disposing of it.)

There are three methods for working out your capital gain. You can choose the method that gives you the best result – that is, the smallest capital gain.

CGT discount method

Eligibility: For assets held for 12 months or more before the relevant CGT event. Not available to companies. For foreign resident individuals, the 50% discount is removed or reduced on capital gains made after 8 May 2012.

Description: Allows you to reduce your capital gain by 50% for resident individuals (including partners in partnerships) and trusts 33.33% for complying super funds and eligible life insurance companies.

How to do it: Subtract the cost base from the capital proceeds, deduct any capital losses, then reduce by the relevant discount percentage. See: The discount method. Indexation method

Eligibility – For assets acquired before 11.45am (by legal time in the ACT) on 21 September 1999 held for 12 months or more before the relevant CGT event.

Description: Allows you to increase the cost base by applying an indexation factor based on the consumer price index (CPI) up to September 1999. How to do it: Apply the relevant indexation factor, then subtract the indexed cost base from the capital proceeds. See: The indexation method. Other method

Eligibility: For assets held for less than 12 months before the relevant CGT event. Description: Basic method of subtracting the cost base from the capital proceeds. How to do it: Subtract the cost base (or the amount specified by the relevant CGT event) from the capital proceeds. See: The 'other' method.

https://www.ato.gov.au/General/Capital-gains-tax/Working-out...

[uuilly]

The total deal with Uber was worth about 20M upfront. The rest was milestone driven. Milestones didn’t happen bc Anthony got fired and there was a fatality that shut the program down.

[humanlion87]

Or maybe he off-shored the rest of his money? This < $100mil are the assets that are under his name and the rest are in tax havens/under different shell companies? Not sure whether that is possible. But it seems like rich people always have multiple ways of hiding their money.

[pembrook]

This is a mid-century Hollywood myth that just won't die. Even when it was still possible to do so, a tiny, tiny minority of Rich Americans were actually evading taxes by hiding money overseas.

Today, it's virtually impossible to hide money overseas as an American after FATCA and various other crackdowns unless you are willing to entirely give up your US citizenship. Since the $USD is the reserve currency of the world, the US government has enormous leverage in mandating foreign banks to report on the assets of every single US citizen with money abroad.

In fact, foreign banks are so scared right now, many will refuse to even deal with Americans outright. It's a huge draconian nightmare for expats--99% of whom are not rich by any means.

Ironically, if you're looking to do something nefarious, the best place to do so is actually right here in the US! Numerous states allow you to create anonymous corporations and trusts.

[JohnJamesRambo]

Have you ever heard of the Panama Papers?

[Mvandenbergh]

The above is the reason why there were very few Americans in those papers. They're not worth the risk.

[manigandham]

Most founders make nowhere near the actual sale price for a VC-funded company, and Otto had 4 co-founders.

[throw03172019]

I wonder if he missed out on his earn out because he was fired from Uber. I’m not sure how that all works legally. Anyone know?

[par]

yolo'ed it all on r/wallstreetbets.

[arcticbull]

Now that hits close to home -- I mean, if he'd timed the drop, he'd probably be a trillionaire by now.

[anonuser123456]

Counterparty risk; something the WSB crowd is going to painfully learn in the next few months :P

[manigandham]

Are you predicting banks going insolvent?

[anonuser123456]

- Beer virus is about to eat Seattle and SF Bay Area. If it does... then it will eat all the US eventually. Hospitals overrun etc. People won't be working. Most disruptive event since WW2.

- Supply chains run dry mid April. Huge supply shock... and will be arriving right as the beer virus starts to crush the west coast.

No one has a risk model that can price those things. It's entirely possible large institutions will go insolvent in the chaos.

[garmaine]

He bought a large house in Florida?

[mfkp]

That's an asset.

[gnicholas]

I think GP is referring to Florida’s generous homestead exception, which allows a debtor to keep his/her home (regardless of opulence) despite creditors’ claims.

[Waterluvian]

Doesn't that mean you're a poor person trying to pay for upkeep of an expensive house? If you sell it they will come take that cash.

[kevin_thibedeau]

You live in the pool house and rent out the mansion to college kids.

[mfkp]

Ah interesting, didn't know about that. Seems like a easily exploitable loophole if so.

[jdhn]

Maybe for cases like this that involve literally millions of dollars, but it really helps normal people from becoming homeless if they fall on hard times for whatever reason.

Source: Family members went through bankruptcy in Florida and were able to get back on their feet much quicker because their house couldn't be seized.

[o-__-o]

Remember you may be able to claim an exemption on your $5m estate but you need to pay the taxes and electric bill and it’s hard to do that when up to 75% of anything you make beyond minimum wage is garnished (I don’t think any state even allows this much but maybe). To be fair some states only allow up to 25%. And some states you cannot garnish at all, you can only levy bank accounts

[toomuchtodo]

It’s is, but the benefits outweigh the moral hazard.

[user982]

Times are tough.

[ur-whale]

>I wonder how he doesn't have more assets after he sold his company to Uber for $680 millions

He may have realized early that Bitcoin is unconfiscatable.

[distances]

I'm not sure how serious your were with the comment, but law enforcement and customs agencies around the world hold now considerable amounts of bitcoins.

[whoisjuan]

Uber is not his employer a long time ago. They fired him precisely to stay out of this dispute.

[freepor]

Somehow I don’t think we’ll see him in a studio apartment eating Instant Ramen.

[dntbnmpls]

> Levandowski just filed for bankruptcy saying he has less than $100M in assets . Does anyone know if he will only pay a percentage or is only delaying this by kicking the can down the road to another court ?

If he has less than $100M in assets, then he will only pay a portion of the judgment. If he, his lawyer and his accountant were smart, he would have moved most of his assets into trust funds, iras and other judgment proof assets. Like Epstein did to protect his wealth from civil lawsuits of the rape victims.

> I would be highly surprised if his employer (Uber) shouldered any of the this

Uber fired him 3 years ago. If they were willing to shoulder the costs, they wouldn't have fired him.

[mikejb]

Levandowski started a Church, around the time shit started to fall around him. I wouldn't be surprised if a lot of his money is hiding there.

[hef19898]

A church? If that isn't a crooked move, I don't know what is. Kind of fits the picture, so.

[Tepix]

http://www.wayofthefuture.church/

[hef19898]

I saw the John Oliver show on televangelists. But TAHT is accepted as an official church? Really? Humans in support of AI working on a peaceful transition yo humans and machines ruling the world?

But hey, if it helps to hide away millions of dollar, I guess why not?

[angry_octet]

They may be stuck with costs and penalties anyway, depending on their contract. It really has nothing to do with his ongoing employment.

[m3kw9]

Prob gets some relief and payment gets restructured. You can’t just sit on 100 mill and declare bankruptcy and go Scott Free.

[speby]

No but creditors would be able to seize assets from this. Bankruptcy (most commonly Chapter 7 or Chapter 11) allow for protections of certain personal property, such as one's house. But the rest of your assets will essentially be vaporized by creditors: This is the whole point of bankruptcy protection. You don't have enough to pay so-and-so and you fear you will never have enough, or that the debt load is so great, you will never be able to pay the debt. So you file bankruptcy, give everything you DO have to creditors, and by law will be able to at least retain assets like a primary house, or at least it will buy time to stop foreclosure and repossession by a creditor (like a bank or other lender). But even then, if you still can't later on afford to get current on the home with on-going income, you would eventually lose the house, too.

[pmorici]

My layman's understanding is it depends on the underlying reason for the legal judgment. When fraud was involved it is supposedly harder to discharge a judgement in bankruptcy.

[throw03172019]

Didn’t he make tens of millions at Google as an employee as well? That is a lot of money to blow through (plus) assuming a nice chunk of Uber stock from Otto.

[anrmq7]

How much does a legal battle with Google cost? More than anyone can afford is my assumption.

[bogomipz]

How does an employee make tens of millions? Was he a very early employee or did Google acquire a company he founded?

[mkl]

$120 million in "Incentive pay": https://www.bizjournals.com/sanjose/news/2017/04/04/anthony-...

[smackmybishop]

Neither, and it was hundreds of millions.

https://www.cnbc.com/2017/04/03/waymos-uber-lawsuit-reveals-...

[bogomipz]

This is what I find so baffling - he didn't need the money and it seems like the whole Otto pursuit had a significant enough downside risk for someone who was already quite wealthy that I'm surprised he was willing to take it.

[mikejb]

Is his church bankrupt, too? I'd start there.

[Tepix]

The website (which consists of exactly one static page) is still up. Did it ever go anywhere? They used to have a signup form for a newsletter. It disappeared.

[refurb]

I don’t believe that court orders for restitution are discharge Le through bankruptcy.

[ineedasername]

And bankruptcy doesn't actually discharge the debt if you have assets-- it just gives you breathing room and a formal legal structure to work with creditors on just what % is possible, who gets paid first, second, etc.

[sunstone]

Yes less than $100m. Probably closer to $4.89 and some long time ago there was a trust in Singapore bulging with much more than $4.89.