1 00:00:15,316 --> 00:00:22,876 Speaker 1: Pushkin. Andy Mitchell could be called a doctor for business, 2 00:00:24,036 --> 00:00:25,836 Speaker 1: but he's not the kind of doctor who does annual 3 00:00:25,876 --> 00:00:30,196 Speaker 1: wellness checkups. Nope. Andy Mitchell's specialty is more alike emergency 4 00:00:30,236 --> 00:00:34,396 Speaker 1: triage for very, very sick companies. You know they're bad 5 00:00:34,436 --> 00:00:36,276 Speaker 1: off because of what people tend to call them at 6 00:00:36,276 --> 00:00:42,676 Speaker 1: this stage, distressed Assets. Andy's firm, Lantern Asset Management, buys 7 00:00:42,756 --> 00:00:45,516 Speaker 1: up businesses in immediate need of cash and willing to 8 00:00:45,516 --> 00:00:48,836 Speaker 1: sell at bargain basement prices. I wanted to talk to 9 00:00:48,836 --> 00:00:51,156 Speaker 1: Andy Mitchell because I'm pretty sure someone like him will 10 00:00:51,196 --> 00:00:53,756 Speaker 1: be involved in some future stage of the company at 11 00:00:53,756 --> 00:00:57,196 Speaker 1: the center of my next book, The now extremely Distressed 12 00:00:57,236 --> 00:01:04,036 Speaker 1: Crypto Exchange FTX. Welcome to on background from Against the Rules. 13 00:01:04,716 --> 00:01:09,356 Speaker 1: I'm Michael Lewis. It's possible that no one will be 14 00:01:09,436 --> 00:01:14,156 Speaker 1: able or willing to revive FTX, which is now in bankruptcy, 15 00:01:14,196 --> 00:01:15,996 Speaker 1: but I figured Andy Mitchell could tell me how a 16 00:01:16,076 --> 00:01:20,116 Speaker 1: rehabilitation scenario might go down if a willing buyer came along. 17 00:01:21,356 --> 00:01:24,676 Speaker 1: One thing I'm finding out about these background interviews, I 18 00:01:24,796 --> 00:01:27,196 Speaker 1: just get interested in them in their own right. Apart 19 00:01:27,236 --> 00:01:31,796 Speaker 1: from FTX, Andy's world intersects with huge stories in the news, 20 00:01:31,916 --> 00:01:34,276 Speaker 1: but also junk food you probably ate as a kid. 21 00:01:34,756 --> 00:01:38,356 Speaker 1: When something goes belly up, people seek him out. I 22 00:01:38,396 --> 00:01:41,196 Speaker 1: asked him how he knows when to get involved. 23 00:01:46,036 --> 00:01:48,516 Speaker 2: I like to say, look, you know, we identify companies 24 00:01:48,556 --> 00:01:52,596 Speaker 2: that have a reason to exist, and the reason they're 25 00:01:52,596 --> 00:01:55,796 Speaker 2: not performing is something you can identify that that can 26 00:01:55,836 --> 00:01:56,876 Speaker 2: be fixed and understood. 27 00:01:57,876 --> 00:01:59,876 Speaker 1: So you find the sick and the wounded and you 28 00:01:59,916 --> 00:02:02,236 Speaker 1: try to fix them. But not all the sick in 29 00:02:02,276 --> 00:02:03,796 Speaker 1: the wounded, just the sick in the wounded that they 30 00:02:03,796 --> 00:02:04,516 Speaker 1: have hope. 31 00:02:04,436 --> 00:02:06,436 Speaker 2: I said, I do a lot of gap analysis, right 32 00:02:06,676 --> 00:02:08,836 Speaker 2: what should be happening and what is happening? And can 33 00:02:08,876 --> 00:02:13,036 Speaker 2: you tafy the gap and a type of understanding of 34 00:02:13,396 --> 00:02:15,796 Speaker 2: you know, and as you know, a big part of 35 00:02:15,836 --> 00:02:20,436 Speaker 2: restructuring is do people really understand where they are and 36 00:02:20,516 --> 00:02:23,196 Speaker 2: where they're going? Because denial is not just a river 37 00:02:23,236 --> 00:02:25,716 Speaker 2: in Egypt r. It's the easiest thing to do as 38 00:02:25,716 --> 00:02:27,836 Speaker 2: a business leaders to say no, no, no, it's it's 39 00:02:27,956 --> 00:02:30,196 Speaker 2: it's the economy, it's COVID. I mean, it's it's the 40 00:02:30,236 --> 00:02:33,436 Speaker 2: first thing that investors don't like when management just blames 41 00:02:33,436 --> 00:02:36,036 Speaker 2: every external factor they can think of, and they so 42 00:02:36,156 --> 00:02:38,356 Speaker 2: well do you really understand why it is you are 43 00:02:38,396 --> 00:02:40,236 Speaker 2: not performing and can you deal with it. 44 00:02:40,956 --> 00:02:45,276 Speaker 1: And do the things that you buy? Are they invariably 45 00:02:45,996 --> 00:02:50,396 Speaker 1: in bankruptcy or are they sometimes not that far gone? 46 00:02:50,516 --> 00:02:52,396 Speaker 2: So a lot of the companies that we get involved 47 00:02:52,396 --> 00:02:57,596 Speaker 2: with are definitely troubled. The legal term bankruptcy judges like 48 00:02:57,636 --> 00:02:59,956 Speaker 2: to use is you know you've entered a zone of insolvency. 49 00:03:00,196 --> 00:03:00,956 Speaker 3: Right, So if. 50 00:03:00,876 --> 00:03:05,276 Speaker 2: You're in a situation where you're unable to maintain a 51 00:03:05,316 --> 00:03:08,316 Speaker 2: status quo or to realize your business plan, that's that's 52 00:03:08,396 --> 00:03:10,716 Speaker 2: usually when we come in. And honestly, the one defining 53 00:03:10,756 --> 00:03:13,236 Speaker 2: thing that brings us in most of time is the 54 00:03:13,356 --> 00:03:15,596 Speaker 2: first thing I ever learned out of business school. 55 00:03:15,916 --> 00:03:16,556 Speaker 3: Cash is king. 56 00:03:16,916 --> 00:03:21,076 Speaker 2: So when liquidity becomes tight, that's usually when people start 57 00:03:21,076 --> 00:03:22,876 Speaker 2: having to look for different solutions. If you have a 58 00:03:22,876 --> 00:03:25,156 Speaker 2: lot of cash, it's amazing how long you can languish 59 00:03:25,156 --> 00:03:29,636 Speaker 2: in non performance land. If you've got time and liquidity, 60 00:03:29,836 --> 00:03:31,236 Speaker 2: you can work through a lot of things. But as 61 00:03:31,276 --> 00:03:34,156 Speaker 2: soon as people start cutting off that lifeblood of any company, 62 00:03:34,156 --> 00:03:35,956 Speaker 2: which is the cash that needs to pay its bills, 63 00:03:35,996 --> 00:03:38,916 Speaker 2: they come to you really enter a different stage. And 64 00:03:38,956 --> 00:03:41,956 Speaker 2: that's unfortunately, most time we get involved, whether it's in 65 00:03:42,036 --> 00:03:44,236 Speaker 2: quart or out of court, it's the time at which 66 00:03:44,236 --> 00:03:46,956 Speaker 2: the company realizes that in the not too distant future 67 00:03:47,236 --> 00:03:48,836 Speaker 2: they're not going to be able to make their payments 68 00:03:48,836 --> 00:03:49,116 Speaker 2: as they. 69 00:03:49,076 --> 00:03:52,276 Speaker 1: Come do what would have been the first case? And 70 00:03:52,316 --> 00:03:54,276 Speaker 1: what's the first time you saw something you said, this 71 00:03:54,316 --> 00:03:56,836 Speaker 1: sick and wounded business can be repaired, and I'm going 72 00:03:56,916 --> 00:03:57,316 Speaker 1: to buy. 73 00:03:57,196 --> 00:03:58,836 Speaker 3: It, you know. I actually so. 74 00:03:58,996 --> 00:04:02,636 Speaker 2: I was a company called Interstate Bakeries, if you remember, 75 00:04:02,636 --> 00:04:05,396 Speaker 2: they made wonderbread and Twinkies and whatnot. 76 00:04:05,516 --> 00:04:06,436 Speaker 3: And right around the. 77 00:04:06,436 --> 00:04:09,476 Speaker 2: Time that Michelle Obama correctly came out and said, hey, 78 00:04:09,476 --> 00:04:13,636 Speaker 2: we need to worry about childhood obesity, they had three 79 00:04:13,716 --> 00:04:16,436 Speaker 2: billion dollars of sales, but really started to have a 80 00:04:16,476 --> 00:04:17,316 Speaker 2: top line issue. 81 00:04:17,396 --> 00:04:18,956 Speaker 1: What does that mean? A top line issue? 82 00:04:19,036 --> 00:04:21,356 Speaker 2: I remember I was sitting in the room the first 83 00:04:21,356 --> 00:04:23,756 Speaker 2: time I met with the CEO, and of course there's 84 00:04:23,756 --> 00:04:26,116 Speaker 2: a plate of Twinkies in the middle room, and he said, 85 00:04:26,116 --> 00:04:28,716 Speaker 2: you want a Twinkie? I said, no, absolutely not. He goes, 86 00:04:28,756 --> 00:04:33,796 Speaker 2: that's the problem, not being twinkies. So it really, you know, 87 00:04:33,836 --> 00:04:36,876 Speaker 2: it was fundamental. Now, the real problem with Interstate Bakeries 88 00:04:36,996 --> 00:04:39,516 Speaker 2: was actually, if you look behind the scene, they were 89 00:04:39,516 --> 00:04:41,916 Speaker 2: making three billion dollars, and yet they were losing one 90 00:04:41,956 --> 00:04:43,036 Speaker 2: hundred million dollars. 91 00:04:42,836 --> 00:04:43,476 Speaker 3: In cash flow. 92 00:04:43,956 --> 00:04:46,356 Speaker 2: And it's because it cost them so much to distribute 93 00:04:46,356 --> 00:04:51,756 Speaker 2: their product. It was a highly unionized workforce, and the 94 00:04:51,796 --> 00:04:53,996 Speaker 2: problem was is that they had grown through acquisitions, so 95 00:04:54,036 --> 00:04:56,436 Speaker 2: they'd acquired something like fifty bakeries in the United States. 96 00:04:56,676 --> 00:05:00,276 Speaker 2: But each time they acquired a bankruptcy, they simply adopted 97 00:05:00,396 --> 00:05:03,516 Speaker 2: or absorbed the existing union contract. So when I sat 98 00:05:03,556 --> 00:05:05,516 Speaker 2: down with the teamsters, even they were troubled. They said, 99 00:05:05,516 --> 00:05:07,116 Speaker 2: you know, Andy, here's the problem. We have fifty different 100 00:05:07,156 --> 00:05:09,396 Speaker 2: contracts in this company, and so if you were draw 101 00:05:09,436 --> 00:05:11,436 Speaker 2: a line on where we want to settle, you've got 102 00:05:11,436 --> 00:05:13,116 Speaker 2: guys that have a better deal, guys that have a 103 00:05:13,156 --> 00:05:15,636 Speaker 2: worse deal. So it's really difficult to herd cats here. 104 00:05:16,036 --> 00:05:18,676 Speaker 2: So you know that that company had. 105 00:05:18,516 --> 00:05:20,236 Speaker 3: A top line problem that could be managed. 106 00:05:20,436 --> 00:05:24,076 Speaker 2: It had a cost structure issue that again you had 107 00:05:24,116 --> 00:05:26,436 Speaker 2: to work through the unions and whatnot, but could be 108 00:05:26,476 --> 00:05:28,876 Speaker 2: managed because when you looked at their competitors, you know 109 00:05:29,836 --> 00:05:32,916 Speaker 2: they were doing ten fifteen percent margins and here we 110 00:05:32,916 --> 00:05:34,036 Speaker 2: were at negative margins. 111 00:05:34,076 --> 00:05:38,356 Speaker 1: There's something disturbing about the idea of every time someone 112 00:05:38,396 --> 00:05:41,236 Speaker 1: eats a twinkie. The company that makes it is losing 113 00:05:41,276 --> 00:05:46,356 Speaker 1: money too, Like is that good for anybody? Right? I mean, 114 00:05:46,356 --> 00:05:48,516 Speaker 1: they're not even making a profit off the twinkies. They're 115 00:05:48,556 --> 00:05:52,596 Speaker 1: sort of subsidizing the twinkies. That's news to me. So 116 00:05:52,156 --> 00:05:54,516 Speaker 1: you're so this is the first problem you deal with 117 00:05:54,556 --> 00:05:55,396 Speaker 1: on your own. 118 00:05:55,396 --> 00:05:57,956 Speaker 2: Well, this is this is the first major target, you 119 00:05:57,996 --> 00:06:00,276 Speaker 2: know that came up. Now, that probably was a bad 120 00:06:00,316 --> 00:06:03,156 Speaker 2: one to bring up, because unfortunately it went through not 121 00:06:03,236 --> 00:06:05,596 Speaker 2: only a chapter eleven, but it went through a chapter 122 00:06:06,156 --> 00:06:08,396 Speaker 2: twenty two, which is the joking term in the industry 123 00:06:08,436 --> 00:06:10,676 Speaker 2: for a second bankruptcy, and then finally it liquidated. 124 00:06:10,956 --> 00:06:13,156 Speaker 1: So in the end it didn't end up working. 125 00:06:13,276 --> 00:06:14,356 Speaker 3: It did not end up working. 126 00:06:14,676 --> 00:06:18,436 Speaker 2: The guys that eventually bought it basically did what had 127 00:06:18,436 --> 00:06:20,396 Speaker 2: to be done, which is they shut the whole thing down, 128 00:06:20,876 --> 00:06:23,236 Speaker 2: tore up all the union agreements, and then once everything 129 00:06:23,316 --> 00:06:27,356 Speaker 2: was still they took the brands, restarted it and made 130 00:06:27,396 --> 00:06:31,276 Speaker 2: a huge profit. But unfortunately it took using the bankruptcy 131 00:06:31,276 --> 00:06:33,676 Speaker 2: code to jettison all those union agreements and everything else, 132 00:06:33,676 --> 00:06:36,796 Speaker 2: because it just no matter how deep. And that's a 133 00:06:36,796 --> 00:06:39,796 Speaker 2: whole different series, is you know, dealing with collective bargaining 134 00:06:39,876 --> 00:06:41,436 Speaker 2: and how to make it a win win for everybody. 135 00:06:41,916 --> 00:06:43,716 Speaker 1: So that wasn't But that wasn't you. You didn't end 136 00:06:43,796 --> 00:06:44,916 Speaker 1: up buying the Twinkie company. 137 00:06:44,996 --> 00:06:45,916 Speaker 3: No, I didn't. 138 00:06:49,156 --> 00:06:52,196 Speaker 1: Hold that thought. After a short break, we're going to 139 00:06:52,276 --> 00:06:56,196 Speaker 1: hear all about a distressed asset Andy did buy, and 140 00:06:56,236 --> 00:07:08,116 Speaker 1: it's distress which was considerable. We'll be right back. I'm 141 00:07:08,156 --> 00:07:12,276 Speaker 1: back with Andy Mitchell, managing director of Lantern Asset Management. 142 00:07:13,356 --> 00:07:15,076 Speaker 1: In this next part, I asked him about his most 143 00:07:15,076 --> 00:07:18,636 Speaker 1: famously distressed asset. I want to guess what that was. 144 00:07:19,556 --> 00:07:21,516 Speaker 1: Here's a clip from CBS This Morning. 145 00:07:22,236 --> 00:07:24,956 Speaker 2: In twenty seventeen, New York Times reporters Jody Kantor and 146 00:07:24,996 --> 00:07:30,316 Speaker 2: Megan Twey uncovered stories of Weinstein's alleged sexual harassment, igniting 147 00:07:30,436 --> 00:07:31,476 Speaker 2: the me too movement. 148 00:07:32,676 --> 00:07:37,156 Speaker 1: Let's talk about your experience buying Harvey Weinstein's company. So 149 00:07:37,236 --> 00:07:40,036 Speaker 1: tell me how you stumble into that in the first place. 150 00:07:40,756 --> 00:07:43,996 Speaker 2: Well, in that one, you had a pret identifiable problem, right, 151 00:07:44,036 --> 00:07:47,196 Speaker 2: which is had a management issue. Jokingly say, well, glad 152 00:07:47,276 --> 00:07:49,436 Speaker 2: you get into Weinstein. It's well, they had a management problem. 153 00:07:49,676 --> 00:07:53,236 Speaker 1: So he gets charged with sexual assault. And then what happens. 154 00:07:53,436 --> 00:07:57,596 Speaker 2: When the New York Times dropped their bombshell story right, 155 00:07:57,636 --> 00:08:01,156 Speaker 2: it put in place a number of events that quickly 156 00:08:01,276 --> 00:08:04,636 Speaker 2: escalated beyond control. Now, if you look at the Weinstein Company, 157 00:08:04,796 --> 00:08:06,716 Speaker 2: it had a lot of problems before the New York 158 00:08:06,716 --> 00:08:10,676 Speaker 2: Times did that story. This liquidity strained, It had a 159 00:08:10,716 --> 00:08:13,276 Speaker 2: serial borrower of money, and even though it had a 160 00:08:13,316 --> 00:08:16,956 Speaker 2: lot of successful movies, the US successful movies were bringing 161 00:08:16,996 --> 00:08:19,396 Speaker 2: it down. I'd be like talking about a mutual fund saying, well, 162 00:08:19,436 --> 00:08:20,956 Speaker 2: they have ten great stocks. 163 00:08:20,636 --> 00:08:22,276 Speaker 3: And like, yeah, but they have fifty bad stocks. 164 00:08:22,796 --> 00:08:25,356 Speaker 2: So unfortunately, you don't get to just talk about the 165 00:08:25,396 --> 00:08:28,076 Speaker 2: ten positive ones, except maybe in Hollywood. 166 00:08:28,116 --> 00:08:30,036 Speaker 1: So they were were they losing money? 167 00:08:30,356 --> 00:08:30,516 Speaker 3: Oh? 168 00:08:30,516 --> 00:08:34,196 Speaker 2: They were already in solvment before the situation when Harvey 169 00:08:34,196 --> 00:08:34,836 Speaker 2: had erupted. 170 00:08:35,076 --> 00:08:36,716 Speaker 1: I didn't realize that, Okay. 171 00:08:36,516 --> 00:08:40,716 Speaker 2: The Weinstein Company, they're good at making movies, but definitely 172 00:08:40,716 --> 00:08:44,076 Speaker 2: not great at contracts and accounting and whatnot. A number 173 00:08:44,076 --> 00:08:47,476 Speaker 2: of different things were in disarray. But ultimately what got 174 00:08:47,476 --> 00:08:50,276 Speaker 2: me to at a table was once the story broke, 175 00:08:50,796 --> 00:08:53,236 Speaker 2: all the creditors started panicking because if Harvey was going 176 00:08:53,276 --> 00:08:55,956 Speaker 2: to be removed from the company, what do you hate 177 00:08:55,996 --> 00:08:57,956 Speaker 2: the man or like the man or love his movies. 178 00:08:58,156 --> 00:09:01,036 Speaker 2: He was seen as the creative energy behind the entire thing, 179 00:09:01,636 --> 00:09:04,636 Speaker 2: and without him, the belief was that there was no 180 00:09:04,676 --> 00:09:07,996 Speaker 2: Weinstein Company, and so credits started to pull back, not 181 00:09:08,076 --> 00:09:10,476 Speaker 2: to mention with what was going going on in terms 182 00:09:10,516 --> 00:09:13,156 Speaker 2: of the negative reaction to Me Too movement, this global movement, 183 00:09:13,676 --> 00:09:16,756 Speaker 2: it also became toxic. Right first there was a business problem. 184 00:09:16,836 --> 00:09:19,436 Speaker 2: Then it became people didn't want to be associated with it. 185 00:09:19,476 --> 00:09:21,676 Speaker 2: They didn't want to carry the movies and television shows 186 00:09:21,676 --> 00:09:24,916 Speaker 2: on TV. They were worried about people boycotting it. 187 00:09:25,076 --> 00:09:27,796 Speaker 1: And where are you physically when this happens? Where are 188 00:09:27,836 --> 00:09:28,236 Speaker 1: you living? 189 00:09:29,396 --> 00:09:32,236 Speaker 2: So I'm living in Dallas, Texas, right, the last place 190 00:09:32,236 --> 00:09:34,796 Speaker 2: you'd expect to find somebody to go to Hollywood and invest. 191 00:09:35,356 --> 00:09:35,876 Speaker 3: We got a. 192 00:09:35,796 --> 00:09:39,996 Speaker 2: Call from actually one of our limited partners called up 193 00:09:39,996 --> 00:09:42,076 Speaker 2: and said, Hey, you know a partner of ours as 194 00:09:42,116 --> 00:09:44,196 Speaker 2: a movie that's going to get caught up in this. 195 00:09:44,276 --> 00:09:46,636 Speaker 3: How do we get it out of this process? Oh? 196 00:09:46,676 --> 00:09:49,116 Speaker 1: That was your way in. Someone called and asked how 197 00:09:49,116 --> 00:09:51,716 Speaker 1: you could extract a single movie from the Weinstein Company. 198 00:09:52,236 --> 00:09:54,236 Speaker 1: What movie was it? 199 00:09:54,236 --> 00:09:57,196 Speaker 2: It was called War with Grandpa with Robert de Niro, 200 00:09:58,236 --> 00:10:00,676 Speaker 2: So it had not been released yet, and you know, 201 00:10:00,716 --> 00:10:02,636 Speaker 2: it's just the fear of the investor was, well, what 202 00:10:02,796 --> 00:10:06,756 Speaker 2: happens if we get stuck into s bankruptcy and the 203 00:10:06,796 --> 00:10:08,796 Speaker 2: movie doesn't get released and you know you've spent all 204 00:10:08,836 --> 00:10:10,516 Speaker 2: this money making this movie, right, You've got all this 205 00:10:10,556 --> 00:10:12,316 Speaker 2: money on the table. In fact, there was six movies 206 00:10:12,356 --> 00:10:14,476 Speaker 2: stuck during the period that we bought. 207 00:10:14,476 --> 00:10:14,756 Speaker 3: Another. 208 00:10:14,796 --> 00:10:18,556 Speaker 2: One's called Upside, great movie, strangely about a turnaround guy. 209 00:10:18,636 --> 00:10:21,716 Speaker 2: Brian Cranston plays a turnaround advisor. It's about a quadr logic. 210 00:10:22,196 --> 00:10:24,596 Speaker 2: So this was a movie that wasn't yet done, but 211 00:10:24,636 --> 00:10:27,156 Speaker 2: they had put considerable money into it. And even though 212 00:10:27,156 --> 00:10:29,796 Speaker 2: you had Kevin Hart and Nicole Kidman a great cast, 213 00:10:30,396 --> 00:10:33,036 Speaker 2: it became the cloud of uncertainty over the entire Weinstein, 214 00:10:33,076 --> 00:10:36,956 Speaker 2: which is what if America boycotts this? So the creditors, 215 00:10:36,996 --> 00:10:39,396 Speaker 2: everybody was in this perpetual state of fear. And so 216 00:10:39,476 --> 00:10:42,156 Speaker 2: we came in and ended up meeting with a couple 217 00:10:42,196 --> 00:10:44,436 Speaker 2: of parties that were said, look, this is a good business. 218 00:10:44,436 --> 00:10:48,036 Speaker 2: It just needs a change of management and we don't 219 00:10:48,076 --> 00:10:50,516 Speaker 2: deserve to lose years and years of work as a 220 00:10:50,516 --> 00:10:51,996 Speaker 2: result of what Harvey did. 221 00:10:52,116 --> 00:10:55,396 Speaker 3: So there was a process can we do it outside 222 00:10:55,396 --> 00:10:55,716 Speaker 3: of court? 223 00:10:56,356 --> 00:10:58,836 Speaker 1: I mean, does it have to be thrown into bankruptcy? 224 00:10:59,876 --> 00:11:01,676 Speaker 3: Yeah? Does it? Does it have to go into bankruptcy? 225 00:11:01,876 --> 00:11:05,076 Speaker 3: Was the kind of question de jure, and. 226 00:11:06,076 --> 00:11:09,076 Speaker 2: Most people would rather do a deal outside of bankruptcy. 227 00:11:09,196 --> 00:11:11,276 Speaker 2: What they don't realize is it's actually a very highly 228 00:11:11,276 --> 00:11:14,116 Speaker 2: effective tool in order to help the company get back 229 00:11:14,116 --> 00:11:16,516 Speaker 2: on its feet. And it's to me, it's the entire 230 00:11:16,556 --> 00:11:19,516 Speaker 2: reason our bankruptcy code exists is that a company that 231 00:11:19,556 --> 00:11:23,036 Speaker 2: continues to go and concern is most likely more valuable 232 00:11:23,036 --> 00:11:25,396 Speaker 2: than a company that is liquidated and resolved. 233 00:11:25,636 --> 00:11:27,756 Speaker 1: Which, so what did you do with Harvey Weinstein's business? 234 00:11:28,796 --> 00:11:31,116 Speaker 2: So I took the position early on with a number 235 00:11:31,116 --> 00:11:32,716 Speaker 2: of the members of the board and the advisor that 236 00:11:32,756 --> 00:11:34,876 Speaker 2: there was no way to buy the company outside of bankruptcy. 237 00:11:35,596 --> 00:11:39,196 Speaker 2: And the main reason was is when you buy a company, 238 00:11:39,556 --> 00:11:42,356 Speaker 2: it's sometime inherits all of those claims and all those 239 00:11:42,916 --> 00:11:46,876 Speaker 2: legacy aliabilities that exist at that time, and people were 240 00:11:46,916 --> 00:11:48,836 Speaker 2: still trying to figure out daily, you know, what the 241 00:11:48,876 --> 00:11:52,756 Speaker 2: liabilities were, who who was to blame, how much what 242 00:11:52,836 --> 00:11:55,916 Speaker 2: Harvey did infiltrated it, whether or not there was hr claims, 243 00:11:55,916 --> 00:11:58,036 Speaker 2: whether or not there was it was an internal and 244 00:11:58,076 --> 00:11:58,276 Speaker 2: if you. 245 00:11:58,356 --> 00:12:00,636 Speaker 1: And if you bought, if you bought it before bankruptcy, 246 00:12:00,716 --> 00:12:04,436 Speaker 1: you'd inherit all those problems. And if anybody, anybody want 247 00:12:04,476 --> 00:12:08,276 Speaker 1: to sue for anything Harvey Weinstein ever did, you'd be liable. 248 00:12:09,436 --> 00:12:12,636 Speaker 2: That. That was my position, because every single day at 249 00:12:12,636 --> 00:12:16,716 Speaker 2: that time, there was another claim popping up against the company, 250 00:12:16,756 --> 00:12:21,276 Speaker 2: either nonpayment or the victims, and so there it was 251 00:12:21,316 --> 00:12:24,916 Speaker 2: just an absolute It's like hitting a bee's nest. It's 252 00:12:24,956 --> 00:12:28,436 Speaker 2: a swarm around this company of people making claims against it. 253 00:12:28,476 --> 00:12:30,276 Speaker 3: And so to me it was a classic. 254 00:12:30,276 --> 00:12:33,156 Speaker 2: It needed to go into bankruptcy just to stop the 255 00:12:33,196 --> 00:12:35,876 Speaker 2: clock for a moment, take a deep breath, assess what's there, 256 00:12:35,916 --> 00:12:37,196 Speaker 2: and then reorganize the company. 257 00:12:37,436 --> 00:12:39,916 Speaker 1: What did you see in this company that was valuable? 258 00:12:41,076 --> 00:12:41,716 Speaker 3: The library? 259 00:12:42,076 --> 00:12:44,196 Speaker 2: I mean it was two hundred and ninety nine movies 260 00:12:44,476 --> 00:12:49,716 Speaker 2: that America loved and actually I loved worldwide. 261 00:12:49,796 --> 00:12:51,356 Speaker 3: Right. You had the Quentin Tarantino collection. 262 00:12:51,476 --> 00:12:54,516 Speaker 2: You had movies like Kings Speech, you had The Butler, 263 00:12:55,156 --> 00:12:58,956 Speaker 2: you had Silver Linings playbook, you had Project Runway television show, 264 00:12:59,036 --> 00:13:04,116 Speaker 2: you had Yellowstone, and Hollywood took this position of nobody's 265 00:13:04,116 --> 00:13:05,796 Speaker 2: going to watch this again because of what Harvey did 266 00:13:05,796 --> 00:13:09,316 Speaker 2: everybody's going to boycott it across America. And this is 267 00:13:09,116 --> 00:13:11,796 Speaker 2: this is tainted goods. What they didn't realize is people 268 00:13:11,836 --> 00:13:14,716 Speaker 2: in Kansas and Houston and Dallas, they didn't even know 269 00:13:14,716 --> 00:13:17,036 Speaker 2: who Harvey Weinstein was to begin with. You know, as 270 00:13:17,076 --> 00:13:19,156 Speaker 2: I said, you know, usually when the credits are playing 271 00:13:19,156 --> 00:13:21,116 Speaker 2: in the beginning movie, most Americans are still getting their 272 00:13:21,116 --> 00:13:24,116 Speaker 2: popcorn or getting their seat. The concept to me that 273 00:13:24,156 --> 00:13:25,916 Speaker 2: people weren't going to watch them, you know, weren't going 274 00:13:25,956 --> 00:13:28,396 Speaker 2: to watch Paddington Bear for example, we about Paddington Bear, 275 00:13:28,716 --> 00:13:30,676 Speaker 2: that my daughter wasn't gonna watch Paddington Or because of 276 00:13:30,756 --> 00:13:33,436 Speaker 2: Harvey Weinstein. It was just ridiculous. I said, you know, 277 00:13:33,596 --> 00:13:35,556 Speaker 2: and you could, and I knew in bankruptcy you could 278 00:13:35,596 --> 00:13:37,956 Speaker 2: buy it free and clear of all the other claims, 279 00:13:37,956 --> 00:13:40,156 Speaker 2: and you could separate the good from the bad, which 280 00:13:40,196 --> 00:13:43,076 Speaker 2: is what bankruptcy at its heart it does. 281 00:13:42,916 --> 00:13:43,956 Speaker 3: To maximize value. 282 00:13:43,996 --> 00:13:46,636 Speaker 2: Is it lets somebody buy it without the worrying about 283 00:13:46,676 --> 00:13:49,756 Speaker 2: well what about so and so, you know, gives them 284 00:13:49,756 --> 00:13:52,236 Speaker 2: a format through the bankruptcy court in order to resolve 285 00:13:52,236 --> 00:13:54,596 Speaker 2: their claims and disputes, and allows the company to go 286 00:13:54,636 --> 00:13:55,076 Speaker 2: and survive. 287 00:13:55,156 --> 00:13:56,036 Speaker 3: So I said, if we can just. 288 00:13:55,996 --> 00:14:00,116 Speaker 2: Get the library out of this alone, there'll be sufficient value. 289 00:14:00,316 --> 00:14:02,636 Speaker 1: Well, so tell me what happened in the bankruptcy, Like, 290 00:14:02,956 --> 00:14:05,516 Speaker 1: how come there aren't dozens of people trying to buy 291 00:14:05,516 --> 00:14:07,956 Speaker 1: this library? And how can you get it at a 292 00:14:07,996 --> 00:14:08,676 Speaker 1: decent price. 293 00:14:09,356 --> 00:14:13,156 Speaker 2: In March of twenty eighteen, we entered a bankruptcy with 294 00:14:13,316 --> 00:14:16,716 Speaker 2: the company. Said here the company's filing bankruptcy, but don't worry. 295 00:14:16,756 --> 00:14:20,076 Speaker 2: We already have a white night. They're going to acquire 296 00:14:20,116 --> 00:14:22,836 Speaker 2: the asset. I set up a company called Land Entertainment 297 00:14:23,116 --> 00:14:25,596 Speaker 2: as the vehicle to come in and buy it. And 298 00:14:26,516 --> 00:14:28,276 Speaker 2: the number that people love the quote is, well, what 299 00:14:28,316 --> 00:14:30,596 Speaker 2: could you read in the bankruptcy court? So the bankruptcy 300 00:14:30,636 --> 00:14:32,876 Speaker 2: court said I bought was a stocking orse for two 301 00:14:32,916 --> 00:14:36,356 Speaker 2: hundred and eighty nine million of cash. What people always 302 00:14:36,356 --> 00:14:38,476 Speaker 2: forget is it's not just the cash you pay, it's 303 00:14:38,476 --> 00:14:42,196 Speaker 2: also the liabilities you assume that matter. So, with all 304 00:14:42,236 --> 00:14:44,556 Speaker 2: the claims that we assumed and everything else were probably 305 00:14:44,556 --> 00:14:45,876 Speaker 2: an area of four un million. 306 00:14:47,676 --> 00:14:49,356 Speaker 1: Did you assume any of the claims that might have 307 00:14:49,356 --> 00:14:52,596 Speaker 1: been filed against Harvey. No, I'm just curious what claims 308 00:14:52,596 --> 00:14:53,276 Speaker 1: did you assume? 309 00:14:53,716 --> 00:14:55,756 Speaker 3: So what we were able to do is and it 310 00:14:55,836 --> 00:14:56,676 Speaker 3: is all very public. 311 00:14:56,716 --> 00:14:59,196 Speaker 2: So we went in and said, look, we're prepared to 312 00:14:59,196 --> 00:15:02,556 Speaker 2: buy all the assets for X, and here are the 313 00:15:02,636 --> 00:15:06,996 Speaker 2: claims that were prepared to assume. And there are certain 314 00:15:06,996 --> 00:15:08,676 Speaker 2: claims that if you don't assume, you're not going to 315 00:15:08,676 --> 00:15:09,116 Speaker 2: get approved. 316 00:15:09,236 --> 00:15:13,036 Speaker 3: Is a stocking horse. So a stocking horse by model 317 00:15:13,156 --> 00:15:14,796 Speaker 3: is to provide a floor bid. 318 00:15:14,996 --> 00:15:16,236 Speaker 1: You're the first bid in an auction. 319 00:15:16,476 --> 00:15:18,556 Speaker 2: You can I can always bid more, but you're not 320 00:15:18,596 --> 00:15:20,476 Speaker 2: supposed to bid less as a stocking horse. So you 321 00:15:20,516 --> 00:15:23,076 Speaker 2: come in with a floor bid and you say here's 322 00:15:23,116 --> 00:15:25,196 Speaker 2: what I'm willing to assume, here's what I'm willing to pay, 323 00:15:25,516 --> 00:15:27,396 Speaker 2: and that bid gets put together as an order and 324 00:15:27,396 --> 00:15:29,516 Speaker 2: then gets put out there for all the other bidders. 325 00:15:30,156 --> 00:15:32,116 Speaker 2: So I came out in March as a stocking horse 326 00:15:32,116 --> 00:15:34,316 Speaker 2: with the company to say, hey, it's not going to 327 00:15:34,316 --> 00:15:36,756 Speaker 2: be obliterated from the earth. There's a buyer here, they're 328 00:15:36,756 --> 00:15:39,036 Speaker 2: going to hire the employees and there's going to be 329 00:15:39,076 --> 00:15:41,356 Speaker 2: a plan. And then we entered the auction. What I 330 00:15:41,356 --> 00:15:44,836 Speaker 2: didn't expect and I may hold a record, I don't know. 331 00:15:45,036 --> 00:15:47,876 Speaker 2: You have to check with your bankruptcy historians. Ninety six 332 00:15:47,916 --> 00:15:53,076 Speaker 2: parties objected to my bid as stocking horse. Why you know, 333 00:15:53,076 --> 00:15:55,316 Speaker 2: when Meryl Street files in the chection to your bid, 334 00:15:55,476 --> 00:15:56,556 Speaker 2: it tends to make news. 335 00:15:56,996 --> 00:15:57,196 Speaker 3: Right. 336 00:15:57,236 --> 00:15:59,836 Speaker 2: A number of people objected, saying, well, you're onored. He 337 00:15:59,876 --> 00:16:01,556 Speaker 2: hasn't said what he's going to do with my claim. 338 00:16:01,996 --> 00:16:03,836 Speaker 2: He hasn't said that he's going to assume my claim. 339 00:16:03,916 --> 00:16:04,556 Speaker 3: I don't think that he. 340 00:16:04,556 --> 00:16:06,716 Speaker 2: Has a right to buy the movie without so all 341 00:16:06,756 --> 00:16:08,036 Speaker 2: those types of objections, right. 342 00:16:08,316 --> 00:16:10,356 Speaker 1: Yeah, So Meryl's in a movie and she's got a 343 00:16:10,356 --> 00:16:13,276 Speaker 1: piece of the movie, and she's still not seeing her cash. 344 00:16:12,756 --> 00:16:14,916 Speaker 2: And somebody told her, hey, you know what, it's going 345 00:16:14,916 --> 00:16:16,876 Speaker 2: through a bankruptcy. Somebody's buying it. If you want to 346 00:16:16,876 --> 00:16:18,596 Speaker 2: get paid or you want to make a claim, now's 347 00:16:18,636 --> 00:16:21,356 Speaker 2: the time. So there was a bit of a pileon 348 00:16:21,436 --> 00:16:22,876 Speaker 2: and a lot of it was because the records were 349 00:16:22,916 --> 00:16:25,076 Speaker 2: so bad that they didn't even know and to be 350 00:16:25,116 --> 00:16:30,236 Speaker 2: honest with nobody had filed bankruptcy in this much of disarray. 351 00:16:30,756 --> 00:16:33,596 Speaker 2: I mean, Weinstein had talent, they had paid in five years, 352 00:16:33,996 --> 00:16:36,396 Speaker 2: but it was unclear about well did he just give 353 00:16:36,476 --> 00:16:37,156 Speaker 2: him another movie? 354 00:16:37,196 --> 00:16:37,716 Speaker 3: What did he do? 355 00:16:37,876 --> 00:16:40,236 Speaker 2: Was there some other form of payment? So it was 356 00:16:40,356 --> 00:16:42,156 Speaker 2: there was a lot of noise around the case that 357 00:16:42,396 --> 00:16:45,996 Speaker 2: got debated in a bankruptcy court about who had a claim, 358 00:16:46,036 --> 00:16:47,556 Speaker 2: what the amount their claim was, and whatnot. 359 00:16:48,036 --> 00:16:53,356 Speaker 1: You're getting an education in Hollywood, yes, And what are 360 00:16:53,396 --> 00:16:58,156 Speaker 1: your takeaways as someone who's a complete outsider walking into 361 00:16:58,156 --> 00:17:01,716 Speaker 1: this place? What strikes you? How's it different than you 362 00:17:01,796 --> 00:17:02,516 Speaker 1: might have expected. 363 00:17:02,676 --> 00:17:04,916 Speaker 2: When people are losing money, the first thing they do 364 00:17:04,996 --> 00:17:08,276 Speaker 2: is look for somebody to blame other themselves, Right, whose 365 00:17:08,316 --> 00:17:10,276 Speaker 2: fault is it? Why am I not getting paid? You 366 00:17:10,316 --> 00:17:14,836 Speaker 2: know who is getting paid? And so people start getting 367 00:17:14,916 --> 00:17:17,196 Speaker 2: very upset about where they are in line, what claim 368 00:17:17,236 --> 00:17:19,556 Speaker 2: they have learned, the difference between what they think they 369 00:17:19,636 --> 00:17:22,596 Speaker 2: have and what they actually have, and contractual rights. And 370 00:17:22,956 --> 00:17:27,316 Speaker 2: in Hollywood it wasn't just money, it was personal, right, 371 00:17:27,396 --> 00:17:29,356 Speaker 2: So you know, I say money is the root of 372 00:17:29,396 --> 00:17:31,836 Speaker 2: all evil, But then you add fame and well, the 373 00:17:31,916 --> 00:17:32,836 Speaker 2: rules don't apply to me. 374 00:17:32,836 --> 00:17:34,636 Speaker 3: I'm so and so. And it was interesting to watch 375 00:17:34,916 --> 00:17:35,636 Speaker 3: Judge Walwrath. 376 00:17:35,796 --> 00:17:38,916 Speaker 2: Mary Walwrath was a presiding judge who's been on the 377 00:17:38,916 --> 00:17:42,676 Speaker 2: bench in Delaware a long time, very experienced practitioner, and 378 00:17:42,916 --> 00:17:44,556 Speaker 2: people would come in and they kind of had this 379 00:17:44,956 --> 00:17:45,716 Speaker 2: do you know who. 380 00:17:45,596 --> 00:17:47,156 Speaker 3: My client is? She? 381 00:17:47,316 --> 00:17:48,756 Speaker 2: He was very like, I don't really care who your 382 00:17:48,796 --> 00:17:51,676 Speaker 2: client is. The bankruptcy code doesn't have exceptions for you know, 383 00:17:51,756 --> 00:17:52,516 Speaker 2: oscar winners. 384 00:17:52,596 --> 00:17:53,276 Speaker 3: I'm sorry. 385 00:17:53,516 --> 00:17:55,796 Speaker 2: So I think that was the most interesting thing and 386 00:17:55,916 --> 00:17:59,076 Speaker 2: probably the biggest thing that we People like, what do 387 00:17:59,156 --> 00:17:59,796 Speaker 2: you expect? 388 00:17:59,836 --> 00:18:00,316 Speaker 3: I said, I don't know. 389 00:18:00,356 --> 00:18:02,076 Speaker 2: I thought, this is going to buy a movie collection 390 00:18:02,116 --> 00:18:03,836 Speaker 2: out of bankruptcy and do what I do. 391 00:18:04,196 --> 00:18:06,556 Speaker 1: Right, right, So what happened in the auction? Did you 392 00:18:06,796 --> 00:18:08,436 Speaker 1: we able to buy it at the floor price? Or 393 00:18:08,436 --> 00:18:09,876 Speaker 1: were there are other people who came in a bit. 394 00:18:10,196 --> 00:18:13,996 Speaker 2: I paid below what my opening price was, which if 395 00:18:14,036 --> 00:18:16,076 Speaker 2: you'd asked me beforehand, I said, I've never seen that 396 00:18:16,196 --> 00:18:19,196 Speaker 2: happen that you actually the stocking horse actually lowered the 397 00:18:19,196 --> 00:18:21,556 Speaker 2: bid and still closed the deal. And there was a 398 00:18:21,676 --> 00:18:24,756 Speaker 2: very tense point right before the auction because there was 399 00:18:24,756 --> 00:18:26,796 Speaker 2: a number of guys bidding, but people were trying to 400 00:18:26,796 --> 00:18:28,996 Speaker 2: come in and bid on individual films, right, somebody wanted 401 00:18:28,996 --> 00:18:31,356 Speaker 2: to come in and buy Jangle and Chained and Glorious Bastards, 402 00:18:31,356 --> 00:18:33,036 Speaker 2: but they didn't want the rest of it, and so 403 00:18:33,076 --> 00:18:35,676 Speaker 2: they said, I'll give you X million for that, And 404 00:18:35,716 --> 00:18:37,876 Speaker 2: if you're a practitioner on the other side, you'd love 405 00:18:37,916 --> 00:18:40,276 Speaker 2: to just put together some of the parts until you 406 00:18:40,356 --> 00:18:43,116 Speaker 2: hit a bigger number. Well, I took the approach of hey, man, 407 00:18:43,236 --> 00:18:44,796 Speaker 2: I don't know what's good and bad, so if I 408 00:18:44,796 --> 00:18:47,316 Speaker 2: don't get everything, I'm out, which upset a lot of people. 409 00:18:47,556 --> 00:18:49,156 Speaker 3: Right, it was all or nothing. 410 00:18:49,716 --> 00:18:52,196 Speaker 2: But then what I realized is they couldn't even tell 411 00:18:52,236 --> 00:18:54,076 Speaker 2: me the status of certain payments. 412 00:18:54,076 --> 00:18:55,516 Speaker 3: They couldn't tell me certain. 413 00:18:55,276 --> 00:18:58,676 Speaker 2: Claims, and it became a lot more complicated, and they 414 00:18:58,716 --> 00:19:02,036 Speaker 2: anticipated there became a real question about whether or not 415 00:19:02,236 --> 00:19:04,996 Speaker 2: they could deliver the assets to me under the terms 416 00:19:04,996 --> 00:19:06,316 Speaker 2: that I had set out. 417 00:19:06,636 --> 00:19:10,436 Speaker 1: Sure because they claim because they claims more complicated than 418 00:19:10,476 --> 00:19:11,116 Speaker 1: they kneed, right. 419 00:19:11,116 --> 00:19:15,436 Speaker 2: I had I thought a real argument that they could 420 00:19:15,516 --> 00:19:17,996 Speaker 2: not deliver the assets in the status that they said. 421 00:19:18,276 --> 00:19:22,116 Speaker 2: So we basically said we wanted a massive purchase price reduction, 422 00:19:22,836 --> 00:19:24,116 Speaker 2: and they threatened to sue. 423 00:19:24,116 --> 00:19:25,076 Speaker 3: There was a lot of back. 424 00:19:24,996 --> 00:19:27,476 Speaker 2: And forth in the press, and you know, people here, 425 00:19:27,516 --> 00:19:31,116 Speaker 2: here's Wall Street coming in with this restructuring professional that's 426 00:19:31,156 --> 00:19:33,516 Speaker 2: trying to But I was just being to me a 427 00:19:33,516 --> 00:19:36,516 Speaker 2: good fiduciary of my of my responsibility of my bestors, 428 00:19:36,516 --> 00:19:38,836 Speaker 2: which is, hey, if you can't deliver what I said, 429 00:19:38,836 --> 00:19:40,636 Speaker 2: I'm not going to pay it. So I actually we 430 00:19:41,116 --> 00:19:43,716 Speaker 2: mutually agreed to a purchase price reduction and I closed. 431 00:19:44,796 --> 00:19:45,836 Speaker 1: What did you buy it for? 432 00:19:46,316 --> 00:19:48,516 Speaker 3: I was like a twenty five million dollar reduction off 433 00:19:48,516 --> 00:19:48,836 Speaker 3: the top. 434 00:19:49,516 --> 00:19:52,036 Speaker 1: What's the most interesting claim you took on that you 435 00:19:52,076 --> 00:19:54,756 Speaker 1: didn't expect to the you. 436 00:19:54,676 --> 00:19:58,116 Speaker 2: Know, the biggest one that hung over in that case 437 00:19:58,436 --> 00:20:02,236 Speaker 2: was what about the victims claim? What happened about the 438 00:20:02,516 --> 00:20:05,836 Speaker 2: women that have claims? And who's going to pay that? 439 00:20:06,396 --> 00:20:08,396 Speaker 2: I mean, you remember this time he had he was 440 00:20:08,596 --> 00:20:11,996 Speaker 2: allegedly he was accused. There was no judgment against him. 441 00:20:12,316 --> 00:20:14,036 Speaker 2: You know, it took three years for them to work 442 00:20:14,076 --> 00:20:16,716 Speaker 2: it out with the court what they got. But you know, 443 00:20:16,756 --> 00:20:18,876 Speaker 2: to me, that wasn't a position of a bidder to take. 444 00:20:19,076 --> 00:20:21,036 Speaker 2: What was amazing is how many people said, no, no, 445 00:20:21,076 --> 00:20:23,636 Speaker 2: you have some obligation to pay. But I said, look, 446 00:20:24,036 --> 00:20:26,196 Speaker 2: I've got five kids, two of them are daughters. 447 00:20:27,076 --> 00:20:28,436 Speaker 3: I'm not the one that's going to set it them 448 00:20:28,436 --> 00:20:29,636 Speaker 3: ount on. How do you. 449 00:20:29,676 --> 00:20:34,756 Speaker 2: What's proper for what allegedly happened? So we avoided it. 450 00:20:35,436 --> 00:20:37,196 Speaker 2: But it was amazing how much it kind of came 451 00:20:37,196 --> 00:20:40,756 Speaker 2: back to us time and time again of why aren't 452 00:20:40,756 --> 00:20:43,596 Speaker 2: you assuming or paying something or doing something in that realm. 453 00:20:43,636 --> 00:20:45,716 Speaker 2: And by the way, those victims had a voice in 454 00:20:45,716 --> 00:20:48,516 Speaker 2: this case throughout the entire end. You know, the insurance 455 00:20:48,556 --> 00:20:50,596 Speaker 2: plays into it. There's a number of things that come 456 00:20:50,716 --> 00:20:54,436 Speaker 2: to bear when people are charging not just the manager, 457 00:20:54,476 --> 00:20:57,276 Speaker 2: but with the company with the crime, which is again 458 00:20:57,356 --> 00:20:58,916 Speaker 2: an FTX issue. 459 00:20:58,676 --> 00:21:01,276 Speaker 1: Right right, So I want to talk about FTEX now, 460 00:21:01,316 --> 00:21:05,236 Speaker 1: but before just just finish the Weinstein conversation. How's the 461 00:21:05,236 --> 00:21:06,836 Speaker 1: company doing now? How did it work out? 462 00:21:07,076 --> 00:21:09,956 Speaker 3: I'm happy to say after five years, six years. 463 00:21:10,236 --> 00:21:13,236 Speaker 2: You know, once we got once Lan Entertainment got outside 464 00:21:13,276 --> 00:21:17,276 Speaker 2: of bankruptcy, we hired a number of people back, We 465 00:21:17,636 --> 00:21:21,676 Speaker 2: cut deals with the producers and distributors. We released The 466 00:21:21,756 --> 00:21:25,516 Speaker 2: Upside at the beginning of twenty nineteen. Everybody thought the 467 00:21:25,556 --> 00:21:28,076 Speaker 2: movie W'd be boycott did one hundred and thirty million worldwide, 468 00:21:28,076 --> 00:21:31,476 Speaker 2: did very very well. Project Runway that everybody thought would 469 00:21:31,516 --> 00:21:33,916 Speaker 2: kind of go down with the stream we work with 470 00:21:33,916 --> 00:21:37,196 Speaker 2: Bravo or we launched the show. So the companies, what 471 00:21:37,756 --> 00:21:40,116 Speaker 2: I think should have happened is once you got outside 472 00:21:39,836 --> 00:21:43,236 Speaker 2: the storm, you know, these are great movies and great 473 00:21:43,236 --> 00:21:44,756 Speaker 2: television shows and they went on to. 474 00:21:46,356 --> 00:21:49,716 Speaker 3: Continue success. So we've been very happy. The company's doing well. 475 00:21:50,636 --> 00:22:00,316 Speaker 1: On background. We'll be right back. I'm back with Andy Mitchell. 476 00:22:00,356 --> 00:22:02,156 Speaker 1: We just heard how it was firm dealt with one 477 00:22:02,156 --> 00:22:07,276 Speaker 1: majorly distressed asset, the Weinstein Company, which is fascinating, but 478 00:22:07,356 --> 00:22:08,916 Speaker 1: it actually called him to get his take on what 479 00:22:08,956 --> 00:22:12,076 Speaker 1: the future might hold for a FTX, another company that's 480 00:22:12,076 --> 00:22:15,676 Speaker 1: sliding down the twin tracks of bankruptcy and criminal charges 481 00:22:15,676 --> 00:22:16,516 Speaker 1: against its founder. 482 00:22:17,236 --> 00:22:19,916 Speaker 2: FTX valuation is the biggest question, and I think that 483 00:22:20,076 --> 00:22:23,596 Speaker 2: was the case beforehand. There's a lot of volatility in this, 484 00:22:23,716 --> 00:22:25,036 Speaker 2: you know, I try to explain to my kids, what's 485 00:22:25,116 --> 00:22:28,756 Speaker 2: what's crypto? What's this is a digital goal, right, We've 486 00:22:28,756 --> 00:22:33,596 Speaker 2: created a digital currency that has value, and the value 487 00:22:33,636 --> 00:22:36,596 Speaker 2: of that has swung wildly over time. So I think 488 00:22:36,636 --> 00:22:39,316 Speaker 2: that was the first time you did the STX when 489 00:22:39,356 --> 00:22:41,076 Speaker 2: it hit the wall, and where it is now is 490 00:22:41,556 --> 00:22:44,356 Speaker 2: what is the underlying asset really worth to value? Movies 491 00:22:44,396 --> 00:22:47,076 Speaker 2: pretty straightforward, especially if it released in the box office, right, 492 00:22:47,236 --> 00:22:49,396 Speaker 2: did one hundred and fifty million. You can almost predict 493 00:22:49,396 --> 00:22:52,356 Speaker 2: with science how well it's going to do on streaming 494 00:22:52,356 --> 00:22:55,556 Speaker 2: platforms and whatnot. It just follows. There's a lot of 495 00:22:55,636 --> 00:23:00,196 Speaker 2: data out there. Cryptocurrencies is a buch a much wider 496 00:23:00,236 --> 00:23:02,876 Speaker 2: swing right, early adoptions and early products. I think the 497 00:23:02,916 --> 00:23:05,676 Speaker 2: valuation is going to be the hardest part of this equation. 498 00:23:06,556 --> 00:23:09,996 Speaker 1: I mean, he got he bought five billion dollars worth 499 00:23:10,036 --> 00:23:13,676 Speaker 1: of venture capital assets, like companies, pieces of companies. What 500 00:23:13,756 --> 00:23:15,076 Speaker 1: about valuing those? 501 00:23:16,396 --> 00:23:19,356 Speaker 2: This one is going to be tough because it's, you know, 502 00:23:19,396 --> 00:23:21,356 Speaker 2: there's a lot. When it's easy to value something, you 503 00:23:21,356 --> 00:23:23,076 Speaker 2: can get a lot of experts in a room, and 504 00:23:23,116 --> 00:23:25,116 Speaker 2: probably if there's ten of them, more. 505 00:23:24,956 --> 00:23:27,756 Speaker 3: Than five are going to go to same direction. This one. 506 00:23:27,836 --> 00:23:29,756 Speaker 2: You could have ten different views in the room with 507 00:23:29,796 --> 00:23:34,916 Speaker 2: ten experts. From zero, it's worthless to you know, it's 508 00:23:34,996 --> 00:23:35,836 Speaker 2: it's in hibernation. 509 00:23:35,956 --> 00:23:36,876 Speaker 3: It's going to be worth a lot. 510 00:23:36,916 --> 00:23:41,556 Speaker 2: It's just there's an uncertainty right now to those that believe, 511 00:23:41,596 --> 00:23:44,476 Speaker 2: you know, those guys made good investments, they just got 512 00:23:44,476 --> 00:23:46,316 Speaker 2: caught in a bad time and a run on a 513 00:23:46,356 --> 00:23:49,356 Speaker 2: bank and it wasn't their fault, which I'm assuming is 514 00:23:50,356 --> 00:23:56,196 Speaker 2: Sam's preferred story, is that if you guys hadn't ran 515 00:23:56,236 --> 00:23:58,516 Speaker 2: and pulled all your deposits out, we wouldn't have been 516 00:23:58,556 --> 00:24:00,516 Speaker 2: in this situation. I wouldn't have had to do what 517 00:24:00,556 --> 00:24:00,876 Speaker 2: I did. 518 00:24:01,996 --> 00:24:06,076 Speaker 1: Is the volatility of the assets or the difficulty of 519 00:24:06,196 --> 00:24:09,756 Speaker 1: valuing the assets. Does that make this a prey special 520 00:24:09,756 --> 00:24:11,956 Speaker 1: bankruptcy case or are there others like it? 521 00:24:12,036 --> 00:24:14,076 Speaker 3: I think this will make it one of the most 522 00:24:14,076 --> 00:24:14,916 Speaker 3: difficult cases. 523 00:24:14,996 --> 00:24:18,596 Speaker 2: Is that the broader the range of views of value 524 00:24:18,916 --> 00:24:21,156 Speaker 2: in a bankruptcy, the harder it is to get to 525 00:24:21,196 --> 00:24:23,196 Speaker 2: a deal. I don't think there's anybody that could come 526 00:24:23,236 --> 00:24:25,476 Speaker 2: by all these assets or would right now. Maybe the 527 00:24:25,516 --> 00:24:27,716 Speaker 2: crypto you could put it in a bucket and say, well, 528 00:24:27,716 --> 00:24:30,156 Speaker 2: look there's there's transparency in the exchange. We can look 529 00:24:30,156 --> 00:24:32,556 Speaker 2: at it on other exchanges. But I think there's going 530 00:24:32,596 --> 00:24:36,076 Speaker 2: to be such a huge range of values for whatever's 531 00:24:36,556 --> 00:24:38,196 Speaker 2: left that that's going to create a problem. 532 00:24:39,076 --> 00:24:41,836 Speaker 1: He had a made five hundred million dollar investment in 533 00:24:41,876 --> 00:24:46,236 Speaker 1: an AI company called Anthropic half a billion dollars. If 534 00:24:46,276 --> 00:24:49,956 Speaker 1: you're running the bankruptcy or you're running the company right now, 535 00:24:50,676 --> 00:24:54,036 Speaker 1: how do you maximize the return on that? Like how 536 00:24:54,036 --> 00:24:58,036 Speaker 1: do you go about unloading a venture capital portfolio? 537 00:24:58,276 --> 00:25:01,796 Speaker 2: I would look to when Lehman went down right and 538 00:25:01,916 --> 00:25:06,956 Speaker 2: you looked at Leman's assets, you had to start to 539 00:25:06,956 --> 00:25:10,196 Speaker 2: put them in three buckets, right, assets that just sell 540 00:25:10,196 --> 00:25:12,516 Speaker 2: them quick. They're melting ice cubes. They're going to go 541 00:25:12,516 --> 00:25:14,476 Speaker 2: down in value. We just need to get them off 542 00:25:14,476 --> 00:25:17,316 Speaker 2: our books. At the other end, you had assets that 543 00:25:17,356 --> 00:25:19,716 Speaker 2: were so good and so readily available in pricing, there 544 00:25:19,716 --> 00:25:21,436 Speaker 2: was a lot of demand for it. You just sold 545 00:25:21,476 --> 00:25:23,436 Speaker 2: it and then they ended up with a whole lot 546 00:25:23,436 --> 00:25:26,556 Speaker 2: of stuff in the middle, which is, okay, it's not 547 00:25:26,596 --> 00:25:29,276 Speaker 2: a melting ice cube. There's not a ready market for it, 548 00:25:30,156 --> 00:25:32,956 Speaker 2: so we shouldn't just assume it's garbage until we should 549 00:25:32,956 --> 00:25:35,636 Speaker 2: take some time and figure it out. Now that's very 550 00:25:35,676 --> 00:25:38,396 Speaker 2: expensive and bankruptcy, but that is a time when you've 551 00:25:38,396 --> 00:25:40,796 Speaker 2: got to separate the assets from the liabilities and say, hey, 552 00:25:41,116 --> 00:25:42,316 Speaker 2: can we at least put them into a. 553 00:25:42,236 --> 00:25:45,116 Speaker 3: Trust or something. That was the problem to fall back 554 00:25:45,116 --> 00:25:45,636 Speaker 3: to Winstein. 555 00:25:45,756 --> 00:25:47,716 Speaker 2: If you were trying to sell it under those conditions, 556 00:25:47,756 --> 00:25:51,316 Speaker 2: when everybody was, you know, pitchforks and torches, let's go 557 00:25:51,356 --> 00:25:53,436 Speaker 2: burn everything that says the wine stain on it, it was 558 00:25:53,476 --> 00:25:54,196 Speaker 2: pretty hard to sell. 559 00:25:54,236 --> 00:25:55,156 Speaker 3: Everybody was scared of it. 560 00:25:55,196 --> 00:25:56,876 Speaker 2: You get six months away and people are like, Eh, 561 00:25:56,876 --> 00:25:59,476 Speaker 2: everybody's watching padding the bear. It doesn't really matter. So 562 00:25:59,516 --> 00:26:01,116 Speaker 2: it's the same kind of thing as there's a bit 563 00:26:01,156 --> 00:26:05,236 Speaker 2: of a stigma. If I'm the professional sitting there looking 564 00:26:05,316 --> 00:26:08,276 Speaker 2: at this saying Okay, I'd rather have the benefit of time. 565 00:26:08,356 --> 00:26:10,596 Speaker 2: Let me get it away from the situation so that 566 00:26:10,596 --> 00:26:12,796 Speaker 2: it doesn't get caught up in the contamination or the 567 00:26:13,156 --> 00:26:17,916 Speaker 2: value drag of Well, anything that Alameda or Sam touched 568 00:26:18,036 --> 00:26:20,436 Speaker 2: is now toxic, and so I think it has to 569 00:26:20,476 --> 00:26:20,956 Speaker 2: go through. 570 00:26:21,596 --> 00:26:23,796 Speaker 3: If the longer runway they can get, the better. 571 00:26:24,876 --> 00:26:27,596 Speaker 1: So you want to draw this out again. 572 00:26:27,636 --> 00:26:29,196 Speaker 3: It depends on the asset, It's all I told people 573 00:26:29,196 --> 00:26:29,596 Speaker 3: like it don't. 574 00:26:29,956 --> 00:26:33,116 Speaker 2: I mean, there's certain assets that you know, if you're 575 00:26:33,556 --> 00:26:35,276 Speaker 2: not investing in, if you're not taking care of it, 576 00:26:35,316 --> 00:26:37,596 Speaker 2: if key people are leaving, if IP is walking out 577 00:26:37,636 --> 00:26:40,036 Speaker 2: the door, like it's one of the reasons I support 578 00:26:40,036 --> 00:26:42,796 Speaker 2: the fact they file bankruptcy quickly. But when you're coming 579 00:26:42,836 --> 00:26:47,316 Speaker 2: about disposal of assets, the it's it's valuation one on 580 00:26:47,316 --> 00:26:49,716 Speaker 2: one right, which is you want to sell when when 581 00:26:49,756 --> 00:26:52,756 Speaker 2: the seller is not there's no compulsion to sell and 582 00:26:52,796 --> 00:26:53,436 Speaker 2: the buyer has. 583 00:26:53,276 --> 00:26:54,076 Speaker 3: No compulsion to buy. 584 00:26:54,116 --> 00:26:56,996 Speaker 2: That's the honest price, right, And so if you sell 585 00:26:57,076 --> 00:27:00,636 Speaker 2: under dress or at a time of uncertainty, it's hard 586 00:27:00,636 --> 00:27:01,476 Speaker 2: to get the best price. 587 00:27:01,836 --> 00:27:03,796 Speaker 3: So if you really believe you have a winner, you 588 00:27:03,836 --> 00:27:06,276 Speaker 3: want to create an environment where it gives you time. 589 00:27:06,636 --> 00:27:09,796 Speaker 2: And and creditors think that way too, which is, you know, 590 00:27:09,876 --> 00:27:12,596 Speaker 2: they have different views of value and they're like, well, 591 00:27:12,596 --> 00:27:14,716 Speaker 2: I don't want you to sell it right now, Let's 592 00:27:14,756 --> 00:27:16,916 Speaker 2: let's get through this and let's get that company stable 593 00:27:16,956 --> 00:27:20,876 Speaker 2: and away from FTX or away from Almeda in that case, right, 594 00:27:21,596 --> 00:27:24,876 Speaker 2: and let's let's get some independent management there and really 595 00:27:24,876 --> 00:27:25,556 Speaker 2: see what's worth. 596 00:27:26,076 --> 00:27:27,756 Speaker 3: Some of the parts here has to be greater than 597 00:27:27,756 --> 00:27:28,916 Speaker 3: the whole. Right. 598 00:27:28,956 --> 00:27:31,596 Speaker 2: So this is not like Weinstein where you can go, hey, 599 00:27:31,676 --> 00:27:34,716 Speaker 2: just buy FTX, right, I mean it was, it's like, 600 00:27:35,316 --> 00:27:37,476 Speaker 2: or just buy Almeda, right, just coming and buy. 601 00:27:37,596 --> 00:27:40,276 Speaker 1: You'd be like buying someone's at the contents of someone's 602 00:27:40,316 --> 00:27:43,436 Speaker 1: attic or basement. It's such a disparate collection of things. 603 00:27:43,556 --> 00:27:44,756 Speaker 2: And you know, you don't want to go with the 604 00:27:44,876 --> 00:27:50,836 Speaker 2: you know, storage unit approach, like hey, just buy whatever's 605 00:27:50,876 --> 00:27:51,156 Speaker 2: in here. 606 00:27:51,276 --> 00:27:53,796 Speaker 3: You know, some's good, some bad. But I mean this one, 607 00:27:53,836 --> 00:27:54,356 Speaker 3: I got to. 608 00:27:54,356 --> 00:27:57,756 Speaker 2: Believe that, not knowing much about al Amidia, but if 609 00:27:57,756 --> 00:28:01,356 Speaker 2: they made twenty investments, they should go out with basically 610 00:28:01,436 --> 00:28:04,556 Speaker 2: a twenty part information memoran that says, here's what they bought, 611 00:28:04,916 --> 00:28:07,396 Speaker 2: here's what it is. You have an opportunity to take 612 00:28:07,436 --> 00:28:10,876 Speaker 2: their place in this position? What you go for, right, 613 00:28:11,076 --> 00:28:12,636 Speaker 2: and you'd look at those, You look at those and 614 00:28:12,636 --> 00:28:15,476 Speaker 2: you know that's the issue that comes up with creditors 615 00:28:15,516 --> 00:28:18,036 Speaker 2: and whatnot, because credits are differently situated. There's credits that 616 00:28:18,116 --> 00:28:19,316 Speaker 2: just want to be paid off and I want the 617 00:28:19,396 --> 00:28:21,996 Speaker 2: nightmare to be over and I want to go on 618 00:28:22,036 --> 00:28:22,476 Speaker 2: the next thing. 619 00:28:22,476 --> 00:28:23,076 Speaker 3: And there's other. 620 00:28:22,956 --> 00:28:25,156 Speaker 2: Credits who know they're going to have an ongoing relationship 621 00:28:25,156 --> 00:28:28,036 Speaker 2: with this company or some facts sate of the company. 622 00:28:28,236 --> 00:28:29,556 Speaker 3: Right, they're owed money, but at. 623 00:28:29,516 --> 00:28:31,436 Speaker 2: The same time, maybe they have an exchange or they 624 00:28:31,476 --> 00:28:35,036 Speaker 2: have an interest in exchange and they're causied strategic in 625 00:28:35,076 --> 00:28:35,596 Speaker 2: their interest. 626 00:28:36,276 --> 00:28:38,876 Speaker 1: What do you think will happen to FTX in the end? 627 00:28:39,916 --> 00:28:41,956 Speaker 1: How you think this is going to play out over many, many, 628 00:28:41,956 --> 00:28:44,836 Speaker 1: many years or do you think that it could be 629 00:28:45,436 --> 00:28:46,116 Speaker 1: simpler than that. 630 00:28:47,876 --> 00:28:49,996 Speaker 2: I think you've got two pieces here, right, You've got 631 00:28:49,996 --> 00:28:53,276 Speaker 2: the FTX, which was the exchange. Me personally, I have 632 00:28:53,316 --> 00:28:56,276 Speaker 2: to believe that business is dead. The people that run exchanges, 633 00:28:56,396 --> 00:28:59,876 Speaker 2: based on the reputation of the exchange is that it's 634 00:28:59,916 --> 00:29:02,516 Speaker 2: an honest place in order for you to exchange goods. 635 00:29:02,836 --> 00:29:05,916 Speaker 2: It's very transparent and everybody's playing by the same rules, 636 00:29:06,436 --> 00:29:09,116 Speaker 2: and that's dead forever the name FTX. 637 00:29:09,356 --> 00:29:11,076 Speaker 3: You might as well restart Lehman Brothers. 638 00:29:11,756 --> 00:29:14,756 Speaker 2: It's been so tarnished and it's such a lack of 639 00:29:14,796 --> 00:29:17,236 Speaker 2: confidence in what they did and what's happened, at least 640 00:29:17,276 --> 00:29:19,956 Speaker 2: what people know. You know, if I'm running this thing, 641 00:29:19,996 --> 00:29:21,516 Speaker 2: that's the first thing I'm going to do, which is, well, 642 00:29:21,556 --> 00:29:25,796 Speaker 2: is there some architecture or structure that somebody did to 643 00:29:25,836 --> 00:29:28,076 Speaker 2: create the legitimate exchange that if you were to change the. 644 00:29:28,116 --> 00:29:29,276 Speaker 3: Name has real value. 645 00:29:29,516 --> 00:29:32,476 Speaker 2: So could FTX live on in another form? Yes, because 646 00:29:32,476 --> 00:29:35,596 Speaker 2: people need to trade. I keep track anymore of the 647 00:29:35,676 --> 00:29:39,756 Speaker 2: number of digital currencies out there, so they need notes exchange. 648 00:29:40,196 --> 00:29:43,116 Speaker 2: Then you look at Alameda and look, it's just a fund. 649 00:29:43,476 --> 00:29:47,316 Speaker 2: So the fund's gone. But you know the investments they made, 650 00:29:47,356 --> 00:29:49,796 Speaker 2: to your point, may they have real value? And I'm 651 00:29:49,796 --> 00:29:51,676 Speaker 2: sure that's going to be his defense is, look, these 652 00:29:51,716 --> 00:29:55,996 Speaker 2: were valuable companies, and you can't say I committed a 653 00:29:55,996 --> 00:29:58,316 Speaker 2: crime because at that certain point in time the value 654 00:29:58,356 --> 00:30:01,876 Speaker 2: that's mearly depressed. And they were venture capital to your point, 655 00:30:01,876 --> 00:30:06,316 Speaker 2: these were highly risky and highly speculated investments, right, venture 656 00:30:06,396 --> 00:30:08,716 Speaker 2: meaning new unchartered territory. 657 00:30:10,316 --> 00:30:13,156 Speaker 3: So I do think a lot of those investments. 658 00:30:12,676 --> 00:30:14,596 Speaker 2: They made are probably still going to make it out 659 00:30:14,636 --> 00:30:17,316 Speaker 2: now if they should never should have made them, they're 660 00:30:17,356 --> 00:30:21,676 Speaker 2: probably problematic to begin with. I mean, it's I think 661 00:30:21,676 --> 00:30:23,436 Speaker 2: what a lot of people seem to be saying is 662 00:30:23,476 --> 00:30:25,196 Speaker 2: that he didn't really know what he was doing, so 663 00:30:25,236 --> 00:30:28,436 Speaker 2: he was out investing in every scheme that crypto had available, 664 00:30:28,476 --> 00:30:31,116 Speaker 2: and so you're gonna have a lot it's just absolute 665 00:30:31,196 --> 00:30:31,716 Speaker 2: junk in here. 666 00:30:32,956 --> 00:30:37,236 Speaker 1: If you imagined us ten years in the future, who 667 00:30:37,236 --> 00:30:39,956 Speaker 1: what kind of person is going to make a killing 668 00:30:40,156 --> 00:30:41,716 Speaker 1: off the FTX bankruptcy? 669 00:30:43,676 --> 00:30:45,516 Speaker 2: And as I see her today, I don't think it's 670 00:30:45,516 --> 00:30:49,276 Speaker 2: going to be a good story because it's. 671 00:30:48,516 --> 00:30:52,996 Speaker 3: Not like, you know, there's let's say, get lucky. 672 00:30:53,396 --> 00:30:58,276 Speaker 2: I don't see it being a phoenix coming from the ashes, right. 673 00:30:58,316 --> 00:31:00,196 Speaker 3: I mean, it's going to be a very long slog 674 00:31:00,276 --> 00:31:01,396 Speaker 3: to regain trust. 675 00:31:01,516 --> 00:31:04,436 Speaker 2: Technically, you're going to earn the comeback of this, right, 676 00:31:04,476 --> 00:31:06,676 Speaker 2: So it's gonna be somebody who buys it and takes 677 00:31:06,716 --> 00:31:10,276 Speaker 2: a long time to say, Okay, how do we earn 678 00:31:10,356 --> 00:31:12,796 Speaker 2: back trust? How do we create real value in this exchange? 679 00:31:12,796 --> 00:31:14,196 Speaker 2: And it's just going to take time to do. I 680 00:31:14,196 --> 00:31:18,036 Speaker 2: don't think there's any quick hero story here that is 681 00:31:18,076 --> 00:31:18,956 Speaker 2: going to emerge. 682 00:31:19,276 --> 00:31:21,756 Speaker 3: And that's why I'd have no idea who wants to 683 00:31:21,756 --> 00:31:22,076 Speaker 3: buy it? 684 00:31:22,116 --> 00:31:24,836 Speaker 2: Because it's this, This is gonna be real work, and 685 00:31:24,876 --> 00:31:27,156 Speaker 2: you're almost better off just starting in new exchange. 686 00:31:27,636 --> 00:31:29,836 Speaker 1: What about a quick hero story in the purchase of 687 00:31:29,876 --> 00:31:32,116 Speaker 1: the five billion dollar venture portfolio? 688 00:31:32,276 --> 00:31:35,636 Speaker 2: If you look at the five billion in investments, again, 689 00:31:35,676 --> 00:31:37,916 Speaker 2: I have to go investment by investment what is it 690 00:31:37,956 --> 00:31:41,036 Speaker 2: that they invested in? Because there's a lot of useful 691 00:31:41,036 --> 00:31:45,116 Speaker 2: things in blockchain and coins that are created that are 692 00:31:45,236 --> 00:31:47,956 Speaker 2: creating real value. And if you were to come in 693 00:31:48,436 --> 00:31:50,876 Speaker 2: when nobody wanted to touch it and buy it and 694 00:31:50,956 --> 00:31:52,876 Speaker 2: stabilize it and carry it. 695 00:31:52,836 --> 00:31:55,036 Speaker 3: Through, I'll meet it. I'll meet it. 696 00:31:55,316 --> 00:31:59,556 Speaker 2: Right, Yeah, probably a lot to work with, right, there's probably, 697 00:31:59,876 --> 00:32:01,876 Speaker 2: But again, your your first objective is to buy it 698 00:32:01,916 --> 00:32:05,436 Speaker 2: and get it as far away from FTX as possible. Right, 699 00:32:05,676 --> 00:32:07,116 Speaker 2: It's almost like you don't want to admit where you 700 00:32:07,156 --> 00:32:10,236 Speaker 2: found it. Would you buy that through my banker? 701 00:32:10,356 --> 00:32:10,596 Speaker 3: Right now? 702 00:32:10,636 --> 00:32:12,596 Speaker 2: Because as soon as you say I bought it from FTX, like, 703 00:32:12,596 --> 00:32:15,076 Speaker 2: oh you sure, it's not. It's just human tendency, right, 704 00:32:15,076 --> 00:32:17,436 Speaker 2: It's just just the scarlet a if you will. 705 00:32:17,596 --> 00:32:20,276 Speaker 1: Yep, all right, So my producer has dug up this quote. 706 00:32:20,316 --> 00:32:24,596 Speaker 1: I think it's pretty funny that you said people have 707 00:32:24,676 --> 00:32:29,836 Speaker 1: called you an opportunistic capitalist, tombstone steeler and raider, but 708 00:32:29,876 --> 00:32:32,596 Speaker 1: you consider what you do to be effective altruism. Why. 709 00:32:33,956 --> 00:32:39,036 Speaker 2: Look, I really believe that you know, the world moves 710 00:32:39,036 --> 00:32:41,316 Speaker 2: in cycles. You go up, you go down, right, You 711 00:32:41,356 --> 00:32:43,036 Speaker 2: have good days and bad days. You live in a 712 00:32:43,076 --> 00:32:43,876 Speaker 2: binary world. 713 00:32:43,996 --> 00:32:44,356 Speaker 3: And so. 714 00:32:46,796 --> 00:32:49,756 Speaker 2: Going out and saying I want to find weak and 715 00:32:49,876 --> 00:32:52,956 Speaker 2: underperforming assets and buy them and bring them back to 716 00:32:52,956 --> 00:32:55,796 Speaker 2: where they should be to me is a very noble pursuit. 717 00:32:55,956 --> 00:33:01,356 Speaker 2: But yep, human tendency is when somebody succeeds to say, well, 718 00:33:01,396 --> 00:33:03,516 Speaker 2: they must have cheated, they must have done something. And 719 00:33:03,556 --> 00:33:07,636 Speaker 2: the more you succeed, the more you must have somehow 720 00:33:08,276 --> 00:33:11,236 Speaker 2: done something that was right. There are people that are like, 721 00:33:11,356 --> 00:33:13,956 Speaker 2: shame on you for making money on the Weinstein company. 722 00:33:13,996 --> 00:33:17,196 Speaker 3: You came across and took advantage of the situation. You know, 723 00:33:17,276 --> 00:33:18,196 Speaker 3: shame on you. Right. 724 00:33:18,276 --> 00:33:20,636 Speaker 2: It's I always said if I wrote a book about 725 00:33:20,636 --> 00:33:23,116 Speaker 2: my life, the opening line would be no good deed 726 00:33:23,116 --> 00:33:26,476 Speaker 2: goes unpunished, Right, Because I look at it as I 727 00:33:26,516 --> 00:33:29,956 Speaker 2: bought an asset that thousands of people worked on to 728 00:33:29,996 --> 00:33:32,396 Speaker 2: make movies and television shows, and then I took it 729 00:33:32,436 --> 00:33:35,396 Speaker 2: from a position of almost going into the abyss and 730 00:33:35,436 --> 00:33:38,716 Speaker 2: put it back into you know, people are enjoying it, 731 00:33:38,756 --> 00:33:41,596 Speaker 2: and you know, the credits did well. And I paid 732 00:33:41,636 --> 00:33:44,396 Speaker 2: more and assume more than anybody else would do. But 733 00:33:44,596 --> 00:33:46,836 Speaker 2: if you're the one that lost money and got wiped out, 734 00:33:46,996 --> 00:33:50,236 Speaker 2: the guy who buys FTX and makes money is somehow evil. 735 00:33:50,996 --> 00:33:52,516 Speaker 1: I really appreciate you doing this for us. 736 00:33:52,556 --> 00:33:54,676 Speaker 3: No, No, it's good. It'll bit of fun and I'm excited. 737 00:33:54,716 --> 00:33:55,596 Speaker 1: Yeah, it's totally fun. 738 00:33:55,716 --> 00:33:56,996 Speaker 3: I'm excited for this book. 739 00:33:57,076 --> 00:33:58,916 Speaker 1: It's it's a really fun book to write. 740 00:33:58,996 --> 00:34:01,116 Speaker 3: All right, see you later, all right, see you later. 741 00:34:03,956 --> 00:34:07,596 Speaker 1: Andy Mitchell is managing director of Lantern Asset Management, a 742 00:34:07,596 --> 00:34:13,196 Speaker 1: private equity firm focused on business turnarounds and restructurings. On 743 00:34:13,396 --> 00:34:16,036 Speaker 1: Background is hosted by me Michael Lewis and produced by 744 00:34:16,076 --> 00:34:20,356 Speaker 1: Catherine Gerardeau and Lydia Jane Kopp. Our editor is Julia Barton, 745 00:34:20,996 --> 00:34:24,956 Speaker 1: Our engineer is Sarah Bruguier. Jake Flanagan helps us with licensing. 746 00:34:26,756 --> 00:34:29,916 Speaker 1: Our show is recorded by Koepher Ruth at Berkeley Advanced 747 00:34:29,956 --> 00:34:34,396 Speaker 1: Media Studios. Our music was composed by Matthias Bossi and 748 00:34:34,476 --> 00:34:39,036 Speaker 1: John Evans of stell Wagon. Sephonet Owen Miller published each 749 00:34:39,396 --> 00:34:44,316 Speaker 1: and every episode on Background is a production of Pushkin Industries. 750 00:34:45,036 --> 00:34:48,356 Speaker 1: Don't forget that we have the website atr podcast dot 751 00:34:48,396 --> 00:34:50,716 Speaker 1: com in case you want to send me a question 752 00:34:50,836 --> 00:34:56,196 Speaker 1: or a complaint or anything else that's atr podcast dot com. 753 00:34:56,396 --> 00:34:58,436 Speaker 1: Watch this feed for the launch of the next season 754 00:34:58,596 --> 00:35:02,516 Speaker 1: of Against the Rules. Until then, to find more Pushkin podcasts, 755 00:35:02,876 --> 00:35:06,556 Speaker 1: listen on the iHeartRadio app, Apple Podcasts, or wherever you 756 00:35:06,596 --> 00:35:09,956 Speaker 1: listen to your podcasts, and if you'd like to listen 757 00:35:10,036 --> 00:35:13,596 Speaker 1: ad free and learn about other exclusive offerings, don't forget 758 00:35:13,596 --> 00:35:17,636 Speaker 1: to sign up for Pushkin Plus subscription at pushkin dot fm, 759 00:35:17,916 --> 00:35:21,236 Speaker 1: slash Plus, or on our Apple show page.