Unformatted text preview: bankrupt won’t hurt them at all. In fact, the company is better off if they do go bankrupt. Simply put, Goldman could care less if AIG survives or not, they are simply rationally acting on their own self-interest. The other situation Daniel describes is the financial state of Six Flags. In this situation, the bondholder would rather Six Flags go bankrupt than settle out of court for reasons possibly being greater financial gain. This instance also centers around rational self-interest. The bondholder is acting rationally based on its best interests. In either situation, the outcome is unfortunate. These so called “empty creditors” are affecting the balance of the system. I guess in the end, no matter what side of the coin you are on, going bankrupt is the best option....
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This note was uploaded on 11/11/2010 for the course ECN 211 taught by Professor Durant during the Fall '10 term at Mesa CC.
- Fall '10