Quote:
Originally Posted by Tron_fdc
I understand that. What I'm getting at is if this starts to happen to companies downtown, does someone (ie government) step in? Or do we just let them collapse? Again, I don't know how bad it is DT, but if it gets REAL ugly then what?
I'm ranting a bit here, but is there seriously not enough bloat to cut in order to get onside on the covenants?
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It's not a new thing or the first in line. Calgary OG companies having their loans called in and folding happens all the time. There are already a few significant examples this year IIRC. Bailouts have never happened. Spyglass went under. Lightstream is facing the same thing (90 days to cover debt) or face receivership right now, etc. This is pretty normal.
Cutting bloat can't create debt re-payments out of thin-air. You actually have to make a big move like selling your core assets/properties, etc. for good value but it's not a good sellers market now.
-edit Terra Energy went down in March as Weitz pointed out. The receiver (E&Y) couldn't even take on the properties because they didn't want the liabilty. A lot of these assets are not easy to sell because of all the environmental regulations and liability that come with them.