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usernamedunbeentaken t1_j0ckdvs wrote

If you don't pay your debt the lenders (or funders in your parlance) seize the company. They are given that right in the original loan agreement, and without that protection they wouldn't have lent the money in the first place. They aren't "stealing" anything.

But as to your original point I don't know what this means, other than proving once again that the more convoluted you make a law and the more regulation you try to introduce, the more unintended consequences can result.

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gyokuro OP t1_j0cr0w8 wrote

I still think they’ll likely come up with a legalese answer for why they won’t have to shutdown the market if canopy space dips below 250k. “Projected future canopy footprint will sufficiently replace the outgoing”

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AhbabaOooMaoMao t1_j0cltyd wrote

>If you don't pay your debt the lenders (or funders in your parlance) seize the company. They are given that right in the original loan agreement, and without that protection they wouldn't have lent the money in the first place. They aren't "stealing" anything.

Very astute observation.

>But as to your original point I don't know what this means, other than proving once again that the more convoluted you make a law and the more regulation you try to introduce, the more unintended consequences can result.

But then off the deep end.

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gyokuro OP t1_j0cnquv wrote

Serious question: does the SPAC factor come into play here in terms of how the debt can be restructured? I am not a lawyer.

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AhbabaOooMaoMao t1_j0cvdpv wrote

In general, when a SPAC can't meet its financing obligations, it will dissolve automatically, and its assets get sold off and distributed to investors and creditors, in the usual course. The officers and directors of the SPAC then get sued by shareholders of the SPAC.

Creditors of a target company usually want a SPAC to go through, and this they have incentive to reach terms with the SPAC, that are contingent on the SPAC completing, at which time the SPAC closes it's deals with the target companies, and they are merged or acquired into the final, public or private corporation, or combination thereof.

If the SPAC fails, the deals don't close, and the target companies continue operating as they normally would.

Here, the SPAC is upside down. Federal law is pretty nuanced and I don't know hardly anything about these particular companies, so I can't say whether the SPAC will terminate now, or if it might be allowed to try and raise more money, or even restructure its own debts.

If it does fail, Theraplant will just continue running without merging. That could be a problem if its potential sale to the SPAC was the thing keeping it afloat. The SPAC could be lending money to distressed target companies to keep them operating before the SPAC closes.

In the case of a grow house here in CT that's ready to open, I can't imagine a scenario where it doesn't open due to a lack of money. If the SPAC fails, and if Theraplant was out of money, it would just find another buyer, instead of the SPAC.

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gyokuro OP t1_j0cwyl7 wrote

So maybe Silver Point Capital just keeps infusing them with runway, plausibly? Similar to what happens in Canada.

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