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by donedeals
1097 days ago
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This is super simple. Twitter put a deposit (think rental deposit) down on their lease in 2020. Instead of depositing $900k with the landlord they deposited 900k into a bank. In turn the bank issued a $900k letter of credit to the landlord who can use the funds in the same fashion a deposit could be used. This is done because LOCs are harder for other creditors to seize in bankruptcy court. At some point Twitter stopped paying their rent and I’m sure there is a clause in the lease that allows the LL to draw down the letter of credit to pay the rent. Twitter also has an obligation the replenish the LOC. |
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