[ttul]

I’m not an employment lawyer, but it seems these former employees have a decent shot. They will eventually win their severance in court. But will they ever be paid?

By the time they win, will “X” even exist in its current corporate form? Or will it have gone bankrupt, only to have its assets purchased, leaving the employees standing in line with all the other creditors.

Indeed, I wonder whether Elon Musk structured the deal with a heavy layer of debt precisely so that the firm could be taken through Chapter 11 and reorganized under a fresh cap table. It wouldn’t be the first time in corporate history that a leveraged buyout resulted in existing stakeholders getting screwed over.

[ip26]

Is he known for plotting financial exploits like that? He certainly isn’t playing to make friends, but I’m not sure we’ve seen that kind of thing out of him before.

[nocoiner]

I know having to say it’s sarcasm ruins the joke, but it’s so hard to tell on the internet sometimes. But… this is sarcasm, right?

[ip26]

Not sarcasm, he is a jerk but I am trying to figure whether it would be in character or not. It sounds more like a play from the “vulture capitalist” toolbox. Although I suppose it could fit with a vision of unburdening a company to allow rebuilding.

[nocoiner]

Check out the time he bailed out his brother and Solar City at the expense of Tesla shareholders. Definitely some sharp financial engineering type shenanigans going on in that deeply conflicted transaction.

[jlmorton]

I don't think X is going to go bankrupt any time soon, as I'm sure Musk can raise a billion dollars, which is what I understand the annual operating loss to be.

However, in the event that it did, the US has a waterfall payment structure. Secured creditors get paid first, then lawyers, then employee wages and taxes, then unsecured creditors, then shareholders.