1 00:00:03,120 --> 00:00:08,360 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. 2 00:00:11,119 --> 00:00:14,040 Speaker 2: Hello and welcome to the Money Stuff Podcast. You're a 3 00:00:14,080 --> 00:00:17,840 Speaker 2: weekly podcast where we talked about stuff related to money. 4 00:00:18,360 --> 00:00:20,320 Speaker 2: I'm Matt Levine and I write the Money Stuff column 5 00:00:20,320 --> 00:00:21,239 Speaker 2: for Bloomberg Opinion. 6 00:00:21,600 --> 00:00:24,079 Speaker 1: And I'm Katie Greifeld, a reporter for Bloomberg News and 7 00:00:24,120 --> 00:00:25,760 Speaker 1: an anchor for Bloomberg Television. 8 00:00:26,360 --> 00:00:27,640 Speaker 2: What are you telling about today, Katie? 9 00:00:27,840 --> 00:00:30,640 Speaker 1: We're going to be talking about Purdue Pharma and non 10 00:00:30,680 --> 00:00:34,080 Speaker 1: consensual third party releases. We're going to be talking about 11 00:00:34,120 --> 00:00:38,080 Speaker 1: empty voting, and then we're going to talk about cryogenics. Yeah, 12 00:00:38,440 --> 00:00:39,120 Speaker 1: the blood Farman. 13 00:00:39,400 --> 00:00:46,360 Speaker 2: Yeah. But before that, there's only one piece of news 14 00:00:46,400 --> 00:00:46,680 Speaker 2: this week. 15 00:00:46,960 --> 00:00:50,280 Speaker 1: Yeah, come on, let's go. You gotta puppy. Tell us 16 00:00:50,760 --> 00:00:53,239 Speaker 1: about this puppy. I've seen a ton of pictures and 17 00:00:53,320 --> 00:00:55,320 Speaker 1: I want to hear you describe her for the audience. 18 00:00:55,440 --> 00:00:58,040 Speaker 2: She is extremely cute. She is a wheat and terrier. 19 00:00:58,400 --> 00:01:03,080 Speaker 2: She's eleven weeks old, is like mostly brown, like whetons 20 00:01:03,080 --> 00:01:05,040 Speaker 2: are sort of beige when they grew up, but when 21 00:01:05,080 --> 00:01:08,280 Speaker 2: they're babies, they're mostly brown, with like a black nose 22 00:01:08,319 --> 00:01:10,800 Speaker 2: and black paws and a little white spot on her tummy. 23 00:01:11,080 --> 00:01:14,000 Speaker 1: Yeah, it's pretty good man. Yeah, she has that cute 24 00:01:14,120 --> 00:01:16,679 Speaker 1: dark face though, oh yeah, does she keep that? Like, 25 00:01:16,720 --> 00:01:18,000 Speaker 1: how does it work with wheatons? 26 00:01:18,360 --> 00:01:21,280 Speaker 2: All of their fur lightens and it becomes more uniform, 27 00:01:21,319 --> 00:01:23,880 Speaker 2: but sometimes their muzzle is darker than the rest of them, 28 00:01:23,880 --> 00:01:24,840 Speaker 2: but it won't stay black. 29 00:01:25,080 --> 00:01:27,760 Speaker 1: Okay. Interesting because my parents have an Irish wolf found 30 00:01:28,240 --> 00:01:30,080 Speaker 1: and we got her as a puppy. They did. I 31 00:01:30,120 --> 00:01:34,440 Speaker 1: don't live with my parents, and she started out much 32 00:01:34,520 --> 00:01:37,160 Speaker 1: darker and like her face was a bit darker and 33 00:01:37,200 --> 00:01:40,480 Speaker 1: then she lightened out. So you're physically here, but I 34 00:01:40,520 --> 00:01:44,320 Speaker 1: feel like you're probably thinking about the puppy I'm thinking about. Yeah, 35 00:01:44,360 --> 00:01:45,880 Speaker 1: but you know what else we're thinking about? 36 00:01:46,280 --> 00:01:50,680 Speaker 2: Non consentual third. Yes, Wow, we stuck transition. 37 00:01:50,960 --> 00:01:54,280 Speaker 1: You were so right Purdue Pharma. This decision actually came 38 00:01:54,360 --> 00:01:55,680 Speaker 1: down a little bit ago. 39 00:01:56,160 --> 00:01:58,120 Speaker 2: Yeah, it's in the news this week and I read 40 00:01:58,160 --> 00:02:01,040 Speaker 2: about it this week because they went back to bankruptcy 41 00:02:01,080 --> 00:02:03,320 Speaker 2: court and they keep doing stuff. But basically if Perdue 42 00:02:03,320 --> 00:02:10,200 Speaker 2: Pharma opioid manufacturer make Toxi Content responsible for untold devastation 43 00:02:11,120 --> 00:02:14,520 Speaker 2: owned by the Sackler family and it went bankrupt a 44 00:02:14,520 --> 00:02:18,919 Speaker 2: few years ago to basically deal with like fairly paying 45 00:02:18,960 --> 00:02:22,680 Speaker 2: out the opioid claims from you know, victims and victims 46 00:02:22,680 --> 00:02:25,880 Speaker 2: families and also like state attorney generals and as part 47 00:02:25,880 --> 00:02:28,040 Speaker 2: of the bankruptcy, you know, basically like there's not that 48 00:02:28,120 --> 00:02:31,399 Speaker 2: much money left in Purdue, although what's left is basically 49 00:02:31,440 --> 00:02:33,600 Speaker 2: like we're going to continue to sell exi content and 50 00:02:33,639 --> 00:02:35,720 Speaker 2: give the proceeds to the people who became addicted to 51 00:02:35,760 --> 00:02:39,880 Speaker 2: oxy content. Right, they reached this deal to pay out 52 00:02:40,120 --> 00:02:43,000 Speaker 2: the victims where they would take what's left of Purdue 53 00:02:43,040 --> 00:02:45,880 Speaker 2: and give them, you know, money out of the continuing business. 54 00:02:46,320 --> 00:02:49,400 Speaker 2: And they would also take six billion dollars give or 55 00:02:49,440 --> 00:02:52,480 Speaker 2: take from the Sackler family who had owned Perdue, who 56 00:02:52,520 --> 00:02:54,280 Speaker 2: had taken a lot of money out of Purdue over 57 00:02:54,320 --> 00:02:56,959 Speaker 2: the years because it was this profitable company that made 58 00:02:56,960 --> 00:03:00,400 Speaker 2: them billionaires, and they reached this deal with it. Sacklers 59 00:03:00,440 --> 00:03:02,840 Speaker 2: would kick in six billion dollars and in exchange for that, 60 00:03:02,880 --> 00:03:04,760 Speaker 2: the bankruptcy court would say, no one can sue the 61 00:03:04,760 --> 00:03:08,120 Speaker 2: Sacklers anymore over opio It's their liability is capped at 62 00:03:08,120 --> 00:03:11,120 Speaker 2: the six billion dollars they're putting back into the predy bankruptcy. 63 00:03:11,280 --> 00:03:16,560 Speaker 2: And this was a controversial thing in bankruptcy law, where 64 00:03:16,760 --> 00:03:19,919 Speaker 2: some bankruptcy courts thought you can do this. You can say, 65 00:03:19,919 --> 00:03:22,160 Speaker 2: we're going to do what are called non consensual third 66 00:03:22,160 --> 00:03:25,720 Speaker 2: party releases. We're going to say everyone's lawsuits against these 67 00:03:25,720 --> 00:03:27,800 Speaker 2: people who are not in bankruptcy but are like connected 68 00:03:27,840 --> 00:03:31,640 Speaker 2: to the bankruptcy, everyone's lawsuits are extinguished forever, and the 69 00:03:31,680 --> 00:03:34,400 Speaker 2: bankruptcy court is just sort of like a powerful arbiter 70 00:03:34,480 --> 00:03:37,600 Speaker 2: or a fairness could extinguish those claims. And this was 71 00:03:37,680 --> 00:03:40,480 Speaker 2: controversial at the time and eventually went to the Supreme Court, 72 00:03:40,720 --> 00:03:43,040 Speaker 2: and last month the Supreme Court said, no, you can't 73 00:03:43,040 --> 00:03:47,080 Speaker 2: do that. Only essentially the company that's in bankruptcy can 74 00:03:47,120 --> 00:03:50,080 Speaker 2: have all of its lawsuits terminated, so the sacklers can't 75 00:03:50,120 --> 00:03:53,920 Speaker 2: get this sort of like universal release from liability. And 76 00:03:54,000 --> 00:03:56,720 Speaker 2: so one thing that means is like the deal is 77 00:03:56,760 --> 00:03:59,400 Speaker 2: off the sacklers. We're going to kick in six billion 78 00:03:59,440 --> 00:04:01,520 Speaker 2: dollars of their mon It's not like sitting in a 79 00:04:01,560 --> 00:04:04,000 Speaker 2: bank account. It's like in these trusts, it's overseas. It's 80 00:04:04,040 --> 00:04:06,880 Speaker 2: like it'd be hard to get that money without them 81 00:04:06,920 --> 00:04:09,200 Speaker 2: voluntarily giving it to you. And they said, we'll give 82 00:04:09,200 --> 00:04:11,200 Speaker 2: you the six billion dollars. We'll still be rich. I 83 00:04:11,440 --> 00:04:12,600 Speaker 2: keep a lot of the money who took out of 84 00:04:12,600 --> 00:04:15,920 Speaker 2: Purdue over the years. But this way you'll certainly get 85 00:04:15,920 --> 00:04:17,640 Speaker 2: the six billion dollars, which is better than you do 86 00:04:17,640 --> 00:04:19,119 Speaker 2: if you had to try to sue US and foreign 87 00:04:19,160 --> 00:04:21,560 Speaker 2: courts and all this stuff. And now that deal is 88 00:04:21,560 --> 00:04:23,960 Speaker 2: off because the Supreme Court said the Sacklers can't get 89 00:04:23,960 --> 00:04:25,960 Speaker 2: what they want from that deal. They can't get a 90 00:04:26,000 --> 00:04:29,279 Speaker 2: total release from claims, and so now it's sort of 91 00:04:29,320 --> 00:04:31,560 Speaker 2: in this limbo. And the thing that happened this week 92 00:04:31,680 --> 00:04:33,440 Speaker 2: is that you know, it's back in the bankruptcy court, 93 00:04:33,960 --> 00:04:38,920 Speaker 2: and the Purdue creditors, the people who are trying to 94 00:04:38,960 --> 00:04:42,280 Speaker 2: get money out of Purdue, basically said they're going to 95 00:04:42,320 --> 00:04:44,760 Speaker 2: file a lawsuit or they are seeking permission to file 96 00:04:44,760 --> 00:04:47,760 Speaker 2: a lawsuit against the sacklers, trying to get money from 97 00:04:47,760 --> 00:04:50,440 Speaker 2: the sacklers to kick back into the bankruptcy estate. Because 98 00:04:50,440 --> 00:04:52,320 Speaker 2: that's kind of like how this goes. When the Supreme 99 00:04:52,320 --> 00:04:54,719 Speaker 2: Court says you can't do this universal sediment, the next 100 00:04:54,720 --> 00:04:57,960 Speaker 2: thing that happens is that Purdue itself sues the Sacklers 101 00:04:58,000 --> 00:04:59,359 Speaker 2: to try to get some money out of them. 102 00:05:00,440 --> 00:05:04,320 Speaker 1: Raises the question of what does this mean for other 103 00:05:04,360 --> 00:05:07,320 Speaker 1: bankruptcy cases, if you don't have non consensual third party 104 00:05:07,360 --> 00:05:11,440 Speaker 1: releases just practically or pragmatically speaking, whatever you want to 105 00:05:11,480 --> 00:05:14,520 Speaker 1: say it, that seems like it would get pretty messy 106 00:05:14,560 --> 00:05:15,200 Speaker 1: pretty quickly. 107 00:05:15,920 --> 00:05:18,640 Speaker 2: Yeah, this is an unusual case, and that the sacklers 108 00:05:18,640 --> 00:05:20,880 Speaker 2: are so personally identified with this and like they have 109 00:05:20,960 --> 00:05:23,719 Speaker 2: a lot of money. But right, there are a lot 110 00:05:23,760 --> 00:05:26,560 Speaker 2: of these what are called best toward bankruptcies where it's 111 00:05:26,560 --> 00:05:29,320 Speaker 2: not just like a company owes money and like doesn't 112 00:05:29,320 --> 00:05:30,560 Speaker 2: have enough money to pay it back, but it's like 113 00:05:30,600 --> 00:05:34,120 Speaker 2: aspestos and tobacco, like the company does something dramatically harmful 114 00:05:34,279 --> 00:05:36,280 Speaker 2: and ends up owing much more money than it ever made, 115 00:05:36,480 --> 00:05:38,320 Speaker 2: and it's like people are looking around for third parties, 116 00:05:38,320 --> 00:05:40,560 Speaker 2: often who made a lot of money running those companies, 117 00:05:40,800 --> 00:05:42,480 Speaker 2: and if you can't get the third party release, then 118 00:05:42,520 --> 00:05:45,599 Speaker 2: like those people are less likely to contribute to the bankruptcy. Now, 119 00:05:45,600 --> 00:05:47,880 Speaker 2: it's an unusual case here because the sacklers took so 120 00:05:47,960 --> 00:05:51,160 Speaker 2: much money out of who do and are quite rich, 121 00:05:51,560 --> 00:05:54,560 Speaker 2: and so getting their money is like really important to 122 00:05:54,600 --> 00:05:56,240 Speaker 2: the bankruptcy. There are a lot of other cases where 123 00:05:56,240 --> 00:05:58,400 Speaker 2: it's like the company itself is the main source of 124 00:05:58,440 --> 00:06:00,880 Speaker 2: money and so like you can still really claims against 125 00:06:00,880 --> 00:06:03,320 Speaker 2: the company. That's what bankruptcy is, right, Like, the bankruptcy 126 00:06:03,360 --> 00:06:06,840 Speaker 2: process is designed to end all lawsuits against Purdue and 127 00:06:06,880 --> 00:06:08,800 Speaker 2: sort of parcel out the money among everyone who had 128 00:06:08,800 --> 00:06:11,919 Speaker 2: a claim. But it's just that's Purdue, right, Purdue is 129 00:06:11,920 --> 00:06:12,920 Speaker 2: in bankruptcy pre. 130 00:06:12,880 --> 00:06:15,719 Speaker 1: Due pharma, perdue pharma, as we've been instructed to call it. 131 00:06:15,880 --> 00:06:18,719 Speaker 2: Yes, right, when I wrote about this, I did occasionally 132 00:06:18,760 --> 00:06:20,760 Speaker 2: call it Purdue, and I got an email from a 133 00:06:20,800 --> 00:06:23,839 Speaker 2: student at Pretty University saying it is not the same thing. 134 00:06:24,279 --> 00:06:25,560 Speaker 2: Please call it predy. 135 00:06:25,320 --> 00:06:28,000 Speaker 1: Far school allegiance just runs deep. 136 00:06:28,240 --> 00:06:30,480 Speaker 2: It's fair. You don't want to be associated with bad stuff. 137 00:06:30,480 --> 00:06:33,200 Speaker 2: But anyway, you know that here, like most of the 138 00:06:33,200 --> 00:06:36,560 Speaker 2: money went out to the sacklers, and so it's particularly 139 00:06:36,560 --> 00:06:38,400 Speaker 2: important to have their contributions. 140 00:06:38,560 --> 00:06:41,000 Speaker 1: So those two numbers, there are eleven billion dollars what 141 00:06:41,120 --> 00:06:45,680 Speaker 1: the sacklers took from Purdue Pharma and six billion dollars 142 00:06:45,720 --> 00:06:49,080 Speaker 1: what they've agreed to give to the victims. If they 143 00:06:49,160 --> 00:06:52,480 Speaker 1: had agreed to give ten billion dollars, if their eleven 144 00:06:52,480 --> 00:06:55,480 Speaker 1: billion dollars, do you think that we'd be having this conversation. 145 00:06:56,360 --> 00:06:58,560 Speaker 2: First of all, they say all these public statements that 146 00:06:58,640 --> 00:07:00,480 Speaker 2: a lot of that money they didn't really take out 147 00:07:00,480 --> 00:07:02,640 Speaker 2: eleven billion dollars, it's like a lot of money when 148 00:07:02,640 --> 00:07:05,440 Speaker 2: to paying taxes and so like. Really the six billion 149 00:07:05,480 --> 00:07:07,000 Speaker 2: is much closer to all of the money that they 150 00:07:07,000 --> 00:07:08,680 Speaker 2: took out than it is to half of the money 151 00:07:08,680 --> 00:07:10,520 Speaker 2: that they took out or the No one thinks they're 152 00:07:10,520 --> 00:07:13,320 Speaker 2: going to be poor after this, Yeah, but uh no, 153 00:07:13,400 --> 00:07:16,040 Speaker 2: I mean the answer is no. The Supreme Court decided 154 00:07:16,160 --> 00:07:18,600 Speaker 2: not a fairness question, but a legal question. I think 155 00:07:18,600 --> 00:07:20,680 Speaker 2: it's tainted by the fact that people are really angry 156 00:07:20,720 --> 00:07:22,160 Speaker 2: at the Sacklers. And I think there are a lot 157 00:07:22,160 --> 00:07:25,080 Speaker 2: of other bankruptcy cases where the third party release was 158 00:07:25,160 --> 00:07:28,280 Speaker 2: less controversial and like was clearly useful to getting a 159 00:07:28,280 --> 00:07:30,920 Speaker 2: deal done, and like the Supreme Court took a case 160 00:07:30,960 --> 00:07:34,240 Speaker 2: where the third party is particularly unsympathetic, where it's these 161 00:07:34,240 --> 00:07:36,320 Speaker 2: billionaires who like sort of cause the help gide epidotg. 162 00:07:36,680 --> 00:07:38,600 Speaker 2: But if you just like read the reasoning of the 163 00:07:38,640 --> 00:07:40,600 Speaker 2: Supreme Court case, it has nothing to do with Rather, 164 00:07:40,640 --> 00:07:43,080 Speaker 2: the settlement is fair and had they kicked in one 165 00:07:43,120 --> 00:07:44,960 Speaker 2: hundred percent of their money and agreed to work for 166 00:07:45,040 --> 00:07:46,880 Speaker 2: the victims for the rest of their lives, it's still 167 00:07:46,960 --> 00:07:48,720 Speaker 2: they wouldn't get a third party release. 168 00:07:48,520 --> 00:07:52,160 Speaker 1: So so no, we could talk about the descent. 169 00:07:52,840 --> 00:07:54,880 Speaker 2: Yeah, I mean, like, I just it's a hard case. 170 00:07:54,920 --> 00:07:57,280 Speaker 2: Like I think that bankruptcy is this weird area of 171 00:07:57,320 --> 00:07:59,120 Speaker 2: law where it's like the bankruptcy court has a lot 172 00:07:59,120 --> 00:08:01,880 Speaker 2: of power to kind of craft the deal that seems 173 00:08:01,920 --> 00:08:03,920 Speaker 2: fairest to it, right, Like, it really is the case 174 00:08:03,920 --> 00:08:07,040 Speaker 2: that bankruptcy gets rid of all of the lawsuits against Perdue, right, 175 00:08:07,040 --> 00:08:09,360 Speaker 2: Like everyone has claims against Perdue, and the bankruptcy court says, 176 00:08:09,440 --> 00:08:12,000 Speaker 2: all those claims are gone forever, and in exchange, you 177 00:08:12,040 --> 00:08:14,240 Speaker 2: get whatever you get from the bankruptcy settlement, which could 178 00:08:14,240 --> 00:08:16,760 Speaker 2: be pennies on the dollar, could be nothing. It extinguishes 179 00:08:16,800 --> 00:08:18,680 Speaker 2: all the claims. Like that's what bankruptcy is. It's like 180 00:08:19,080 --> 00:08:21,720 Speaker 2: dividing up and ending all the claims against the company. 181 00:08:22,200 --> 00:08:25,240 Speaker 2: And because of that, bankruptcy courts are really in the 182 00:08:25,280 --> 00:08:29,360 Speaker 2: business of like trying to craft fair deals and then 183 00:08:29,480 --> 00:08:32,600 Speaker 2: like sort of imposing them on people who are making 184 00:08:32,600 --> 00:08:36,240 Speaker 2: everyone unhappy. Basically like imposing a deal on everyone even 185 00:08:36,240 --> 00:08:39,360 Speaker 2: if they object. And it's sort of natural for the 186 00:08:39,400 --> 00:08:42,000 Speaker 2: bankruptcy court to say, well, in order to get the 187 00:08:42,040 --> 00:08:44,640 Speaker 2: fair deal that like works the best. We need to 188 00:08:45,120 --> 00:08:47,000 Speaker 2: not only end claims against Purdue, but we have to 189 00:08:47,080 --> 00:08:49,600 Speaker 2: end these claims against the sacklers. And because that's part 190 00:08:49,640 --> 00:08:52,960 Speaker 2: of like achieving our goal of fairness, it's like sort 191 00:08:53,000 --> 00:08:55,520 Speaker 2: of part of our powers. But the Supreme Court said 192 00:08:55,520 --> 00:08:57,120 Speaker 2: it's not really part of your powers, right, Like you 193 00:08:57,160 --> 00:08:59,960 Speaker 2: only have jurisdiction over the bankruptcy, not over the you know, 194 00:09:00,040 --> 00:09:02,040 Speaker 2: everyone else who comes into contact with it, and so 195 00:09:02,040 --> 00:09:03,960 Speaker 2: it's not part of your powers. And I think there's 196 00:09:03,960 --> 00:09:05,720 Speaker 2: like a good argument for that. It's just like a 197 00:09:05,760 --> 00:09:08,760 Speaker 2: matter of law. But yeah, it was a five to 198 00:09:08,760 --> 00:09:11,200 Speaker 2: four decision in the Supreme Court, and Justice Kavanaugh wrote 199 00:09:11,200 --> 00:09:13,560 Speaker 2: this the sense saying, you know, this is a shiny 200 00:09:13,600 --> 00:09:15,679 Speaker 2: example of the bankruptcy process. Right. The point of the 201 00:09:15,720 --> 00:09:18,640 Speaker 2: bankruptcy is to get as much money as you can 202 00:09:18,720 --> 00:09:21,240 Speaker 2: for the victims. And they did that, and they did 203 00:09:21,280 --> 00:09:24,760 Speaker 2: it here by a sort of compromise that made everyone unhappy, 204 00:09:24,840 --> 00:09:27,360 Speaker 2: but kind of like achieved the rough justice of getting 205 00:09:27,360 --> 00:09:29,560 Speaker 2: as much money as possible for the victims. And then 206 00:09:29,600 --> 00:09:31,480 Speaker 2: the Supreme Court says, no, you can't do that, and 207 00:09:31,520 --> 00:09:34,400 Speaker 2: so now it's sort of in this limbo where probably 208 00:09:34,440 --> 00:09:35,720 Speaker 2: the victims will get less money. 209 00:09:36,160 --> 00:09:38,760 Speaker 1: Yeah, in that descent you wrote, because some victims or 210 00:09:38,760 --> 00:09:42,080 Speaker 1: creditors may hold out for any potential future settlement for 211 00:09:42,240 --> 00:09:44,520 Speaker 1: any one of those reasons and instead still sue, the 212 00:09:44,520 --> 00:09:48,000 Speaker 1: Sacklers are less likely to settle with anyone in the 213 00:09:48,080 --> 00:09:50,480 Speaker 1: first place. Maybe the clouds will part, but in a 214 00:09:50,520 --> 00:09:54,720 Speaker 1: world where non consensual, non debtor releases are categorically impermissible, 215 00:09:55,120 --> 00:09:58,280 Speaker 1: any hope for a new deal seems questionable. So we'll see. 216 00:09:58,520 --> 00:10:02,080 Speaker 2: Yeah, And I wrote on Thursday that they're trying for 217 00:10:02,080 --> 00:10:04,599 Speaker 2: a new deal, right, Yeah. The biggest claims against the 218 00:10:04,640 --> 00:10:08,320 Speaker 2: Sacklers don't belong to like individual victims. They belong to Purdue. 219 00:10:08,480 --> 00:10:08,640 Speaker 1: Right. 220 00:10:08,880 --> 00:10:11,280 Speaker 2: The biggest claim against the Sackler is they took all 221 00:10:11,320 --> 00:10:14,640 Speaker 2: this money out of Purdue, and Purdue has, like in 222 00:10:14,720 --> 00:10:17,120 Speaker 2: bankruptcy claims that they should give the money back, and 223 00:10:17,160 --> 00:10:20,160 Speaker 2: so they will bring those cases against the Sacklers, and 224 00:10:20,559 --> 00:10:22,760 Speaker 2: they will hope that the Sacklers will settle those claims 225 00:10:22,760 --> 00:10:24,560 Speaker 2: and we'll say, you know, we're not going to get 226 00:10:24,800 --> 00:10:27,120 Speaker 2: released from all the other creditors, but we'll get released 227 00:10:27,120 --> 00:10:29,280 Speaker 2: from Purdue, and that's like the biggest thing. So we're 228 00:10:29,280 --> 00:10:31,120 Speaker 2: going to settle that. But will they settle that for 229 00:10:31,160 --> 00:10:34,400 Speaker 2: six billion dollars. There's some chance that it is, in fact, 230 00:10:34,400 --> 00:10:35,880 Speaker 2: if you're a fantasy that will get any money out 231 00:10:35,880 --> 00:10:36,240 Speaker 2: of them. 232 00:10:36,320 --> 00:10:53,200 Speaker 1: So watch this space. Let's talk about empty voting and 233 00:10:53,480 --> 00:10:57,840 Speaker 1: politan versus Massimo, which you've described as a long, weird 234 00:10:57,880 --> 00:10:58,480 Speaker 1: proxy fight. 235 00:10:58,520 --> 00:11:00,760 Speaker 2: Okay, here's how weird it is. I suppose this company, 236 00:11:00,760 --> 00:11:03,000 Speaker 2: it's like a health tech company. They like sued Apple 237 00:11:03,040 --> 00:11:06,040 Speaker 2: over Apple Watch, like they're you know, they through something. Yeah, 238 00:11:06,160 --> 00:11:07,840 Speaker 2: health pulls something. 239 00:11:08,040 --> 00:11:10,520 Speaker 1: It was a big deal, like a year ago. 240 00:11:10,720 --> 00:11:14,679 Speaker 2: Yeah. So anyway, but there's a company, public company, and 241 00:11:15,200 --> 00:11:18,440 Speaker 2: Polotan is a hedgehund that ran a proxy fight complaining 242 00:11:18,440 --> 00:11:21,160 Speaker 2: about how they run their business and one and got 243 00:11:21,200 --> 00:11:22,920 Speaker 2: two seats on the board of directors, which has like 244 00:11:22,920 --> 00:11:25,480 Speaker 2: five members. And so they're on the board and they're 245 00:11:25,559 --> 00:11:27,960 Speaker 2: running another proxy fight to get more directors because they're 246 00:11:28,000 --> 00:11:31,120 Speaker 2: like this company is still stonewalling us, like they're having 247 00:11:31,160 --> 00:11:34,000 Speaker 2: three two board votes where like the Polotan guys lose 248 00:11:34,040 --> 00:11:36,000 Speaker 2: out on the vote and they claim they're not getting 249 00:11:36,080 --> 00:11:37,960 Speaker 2: enough information and they're sort of they're keeping the board 250 00:11:37,960 --> 00:11:40,640 Speaker 2: in the dark. So it's this very like awkward boardroom 251 00:11:40,720 --> 00:11:43,960 Speaker 2: tension where like the activist and the company's chairman are 252 00:11:44,000 --> 00:11:46,280 Speaker 2: both in the boardroom at the same time and apparently 253 00:11:46,320 --> 00:11:49,199 Speaker 2: still vehemently dislike each other. But anyay, they're running a 254 00:11:49,200 --> 00:11:51,120 Speaker 2: proxy fight. So they're company is holding a shareholder meeting 255 00:11:51,120 --> 00:11:53,440 Speaker 2: at the end of July to vote on whether the 256 00:11:53,480 --> 00:11:56,960 Speaker 2: company's nominees or the Polyotan nominees will get elected. And 257 00:11:57,080 --> 00:12:02,600 Speaker 2: Polotan just filed this letter saying that the company is 258 00:12:02,640 --> 00:12:06,720 Speaker 2: doing some empty voting. So empty voting is like in theory, 259 00:12:06,760 --> 00:12:10,240 Speaker 2: it's like you own one percent of the stock or whatever, 260 00:12:10,640 --> 00:12:14,040 Speaker 2: and you get the votes for like ten percent of 261 00:12:14,080 --> 00:12:17,400 Speaker 2: the stock. So like classically you like buy eleven percent 262 00:12:17,440 --> 00:12:19,959 Speaker 2: of the stock, you short ten percent of the stock, right, 263 00:12:20,000 --> 00:12:22,720 Speaker 2: so you're like long eleven percent, short ten percent. You're 264 00:12:23,040 --> 00:12:25,160 Speaker 2: net long one percent, So you only own one percent 265 00:12:25,160 --> 00:12:27,000 Speaker 2: of the stock, but you have eleven percent of the 266 00:12:27,080 --> 00:12:31,000 Speaker 2: votes and then you vote way out of proportion to 267 00:12:31,000 --> 00:12:32,960 Speaker 2: your economic interest. This is the thing that people like 268 00:12:33,000 --> 00:12:35,760 Speaker 2: talk about as a concept a lot and you rarely 269 00:12:35,800 --> 00:12:39,160 Speaker 2: see like actual cases of it, and here I'm not 270 00:12:39,200 --> 00:12:41,400 Speaker 2: sure you see actual cases of it. But like Polytan says, 271 00:12:41,400 --> 00:12:43,080 Speaker 2: you know, we got like the voting records and it 272 00:12:43,080 --> 00:12:46,840 Speaker 2: seems like this one brokerage firm voted a lot of shares, 273 00:12:46,880 --> 00:12:48,600 Speaker 2: like a lot more than it owned a week before 274 00:12:48,640 --> 00:12:50,680 Speaker 2: the record date and a lot more than it owned 275 00:12:50,679 --> 00:12:52,959 Speaker 2: a week after the record date. So what they think 276 00:12:53,000 --> 00:12:56,760 Speaker 2: happened is essentially it borrowed that stock from other shareholders 277 00:12:57,160 --> 00:12:59,160 Speaker 2: just around the record date for the vote, so that 278 00:12:59,160 --> 00:13:01,240 Speaker 2: it would own ze point nine percent of the stock 279 00:13:01,880 --> 00:13:03,760 Speaker 2: just at the vote, and then it got rid of 280 00:13:03,760 --> 00:13:06,160 Speaker 2: that stock afterwards, so it never had the economic exposure. 281 00:13:06,600 --> 00:13:09,160 Speaker 2: They say it's a brokerage firm affiliated with an investor 282 00:13:09,160 --> 00:13:11,400 Speaker 2: who's a friend of the chairman of the company, and 283 00:13:11,440 --> 00:13:13,760 Speaker 2: so it's like they called it a favor and like 284 00:13:13,840 --> 00:13:14,720 Speaker 2: just got a lot of votes. 285 00:13:14,800 --> 00:13:18,880 Speaker 1: How do you prove friendship? I mean, do they have 286 00:13:18,920 --> 00:13:19,880 Speaker 1: a podcast together? 287 00:13:20,880 --> 00:13:25,280 Speaker 2: What is this? It doesn't matter. Like if someone actually 288 00:13:25,600 --> 00:13:27,960 Speaker 2: borrows ten percent of the stock to vote it and 289 00:13:27,960 --> 00:13:30,040 Speaker 2: then that gets rid of it the next day, then 290 00:13:30,400 --> 00:13:33,280 Speaker 2: that's weird. Yeah, that's weird. And then you know, like polytimes, 291 00:13:33,320 --> 00:13:34,920 Speaker 2: I always should investigate it, right, and like if it 292 00:13:34,960 --> 00:13:36,720 Speaker 2: turns out that the chairman of the company was like 293 00:13:37,040 --> 00:13:38,959 Speaker 2: emailing the guy being like, hey, borrow ten percent of 294 00:13:39,000 --> 00:13:41,000 Speaker 2: the stock so you can vote then that's bad, whether 295 00:13:41,080 --> 00:13:42,400 Speaker 2: or not they have a podcast together. 296 00:13:42,640 --> 00:13:44,760 Speaker 1: I was going to ask you that is it bad. 297 00:13:45,120 --> 00:13:47,880 Speaker 1: They're alleging that this happened, et cetera, But is this 298 00:13:48,000 --> 00:13:48,680 Speaker 1: not allowed? 299 00:13:48,840 --> 00:13:50,679 Speaker 2: I don't know. I don't know. No one knows, right, 300 00:13:50,720 --> 00:13:52,160 Speaker 2: I mean, like, this is the thing that people talk 301 00:13:52,160 --> 00:13:54,000 Speaker 2: about and people like write papers about because I think 302 00:13:54,000 --> 00:13:57,800 Speaker 2: it's interesting. It seems like it should be bad, right. 303 00:13:57,840 --> 00:14:00,840 Speaker 2: It seems like the point of shareholder voting is that 304 00:14:01,200 --> 00:14:05,080 Speaker 2: you own a portion of the company and you care 305 00:14:05,160 --> 00:14:09,360 Speaker 2: about the company being good because it's like your stock, right, 306 00:14:09,400 --> 00:14:10,640 Speaker 2: So you want the stock to go up, you want 307 00:14:10,720 --> 00:14:13,520 Speaker 2: the company to be profitable, all those things, and so 308 00:14:14,240 --> 00:14:16,520 Speaker 2: your votes are in proportion to your economic interest in 309 00:14:16,559 --> 00:14:19,920 Speaker 2: the company. And if you find a way to get 310 00:14:19,960 --> 00:14:22,280 Speaker 2: votes that are not in proportion to your economic interest, 311 00:14:22,640 --> 00:14:27,840 Speaker 2: that seems like it's wrong and not how voting is 312 00:14:27,880 --> 00:14:31,680 Speaker 2: supposed to work. But there's no actual rule that says 313 00:14:31,680 --> 00:14:34,240 Speaker 2: your voting has to be in proportion to your economic interest. Then, 314 00:14:34,280 --> 00:14:36,520 Speaker 2: you know, we've talked a lot about like the Paramount deal, 315 00:14:36,640 --> 00:14:38,320 Speaker 2: where like the whole point of the Paramount deal is 316 00:14:38,320 --> 00:14:41,000 Speaker 2: that Cherry Redstone owned like ten percent of the stock 317 00:14:41,080 --> 00:14:43,200 Speaker 2: and had you know, seventy five percent of the votes, right, 318 00:14:43,680 --> 00:14:46,240 Speaker 2: So it's not like a love of nature or as 319 00:14:46,240 --> 00:14:48,000 Speaker 2: far as I can tell, a rule of the SEC 320 00:14:48,280 --> 00:14:49,920 Speaker 2: that you need to have votes in proportion to your 321 00:14:49,960 --> 00:14:52,080 Speaker 2: economic interest. Like I just don't think there's a rule 322 00:14:52,120 --> 00:14:53,920 Speaker 2: that says, like if you own ten percent of the 323 00:14:53,960 --> 00:14:56,960 Speaker 2: stock and then do a swap with a bank where 324 00:14:56,960 --> 00:14:58,520 Speaker 2: you're short ten percent of the stock and so you 325 00:14:58,520 --> 00:15:01,160 Speaker 2: have no net exposure and rule says you can't vote. 326 00:15:01,640 --> 00:15:04,920 Speaker 1: I do wonder, like what the incentive for this brokerage 327 00:15:04,960 --> 00:15:08,160 Speaker 1: firm associated with an investor who is a friend of 328 00:15:08,560 --> 00:15:11,560 Speaker 1: the Massimo chairman. What is their incentive to do this 329 00:15:11,720 --> 00:15:14,640 Speaker 1: beyond their friendship? You know, I have a lot of friends, 330 00:15:14,640 --> 00:15:17,520 Speaker 1: and there's not a lot I would do for them. 331 00:15:17,800 --> 00:15:19,600 Speaker 2: I feel like if I had a lot of money 332 00:15:19,760 --> 00:15:22,200 Speaker 2: and someone was like, would you empty vote for me 333 00:15:22,240 --> 00:15:24,280 Speaker 2: in a proxy fight, I would say yes, just because 334 00:15:24,360 --> 00:15:27,000 Speaker 2: it's like a cool legal precedent. Yeah, Like I don't know, 335 00:15:27,320 --> 00:15:30,600 Speaker 2: like you get it, yeah exactly, but no, I mean, 336 00:15:30,760 --> 00:15:32,320 Speaker 2: like what's in it for them? But it's unclear how 337 00:15:32,360 --> 00:15:34,520 Speaker 2: much it costs them, right, because like you do have 338 00:15:34,560 --> 00:15:35,920 Speaker 2: to do it right, it's. 339 00:15:35,800 --> 00:15:38,680 Speaker 1: Like the pain, Yeah, I mean the effort alone. 340 00:15:38,840 --> 00:15:41,640 Speaker 2: There's some transaction costs. Loosely speaking, what you're doing is 341 00:15:41,680 --> 00:15:43,880 Speaker 2: borrowing the stock for a couple of days, which is 342 00:15:43,920 --> 00:15:46,160 Speaker 2: like you pay a stock borrow a fee, which is 343 00:15:46,240 --> 00:15:51,120 Speaker 2: like for like most liquid stocks, it's like, yeah, on 344 00:15:51,160 --> 00:15:53,040 Speaker 2: the order of twenty five basis points per anum, so 345 00:15:53,080 --> 00:15:55,800 Speaker 2: it's like not that much, but it's yeah, little cost. 346 00:15:56,120 --> 00:15:58,400 Speaker 2: But probably you're not literally just paying a stock biffy. 347 00:15:58,480 --> 00:16:00,880 Speaker 2: Probably you're like doing something sort of thing where you're 348 00:16:00,920 --> 00:16:04,040 Speaker 2: like buying the stock and simultaneously shorting it, or like 349 00:16:04,280 --> 00:16:06,200 Speaker 2: buying the stock and doing a derivative. So you're playing 350 00:16:06,280 --> 00:16:09,240 Speaker 2: some transaction costs. So it costs you money. It doesn't 351 00:16:09,240 --> 00:16:11,480 Speaker 2: cost you like as much money as buying ten percent 352 00:16:11,480 --> 00:16:13,400 Speaker 2: of the company, but it costs you some money. What's 353 00:16:13,440 --> 00:16:16,080 Speaker 2: in it for them? I mean like literally one possibility 354 00:16:16,120 --> 00:16:19,120 Speaker 2: is like there's no allegation they weren't a shareholder, right, 355 00:16:19,480 --> 00:16:21,040 Speaker 2: And so if you're like a one percent sharehold of 356 00:16:21,120 --> 00:16:24,680 Speaker 2: the company, and you think one side here is clearly 357 00:16:24,760 --> 00:16:26,800 Speaker 2: right and one side is wrong and it's better for 358 00:16:26,840 --> 00:16:30,160 Speaker 2: the company for Massimo to win this proxy fight, then 359 00:16:30,720 --> 00:16:32,920 Speaker 2: doing this empty voting costs you a little bit of money, 360 00:16:33,120 --> 00:16:35,720 Speaker 2: but it gets you the right result in the proxy fight, 361 00:16:35,800 --> 00:16:37,880 Speaker 2: and then you're one percent stake is worth more. Right, 362 00:16:37,920 --> 00:16:39,960 Speaker 2: So that's a possible explanation. 363 00:16:39,680 --> 00:16:41,560 Speaker 1: Right, I mean that, but that comes back to the 364 00:16:41,560 --> 00:16:44,360 Speaker 1: point you made that like in activist hedge fund, like 365 00:16:44,400 --> 00:16:47,680 Speaker 1: they would want to have the economic exposure as well. 366 00:16:48,000 --> 00:16:50,040 Speaker 2: Yeah, it's hard to know, right, Like loosely speaking, if 367 00:16:50,040 --> 00:16:51,760 Speaker 2: you're an activist, you can own more than ten percent 368 00:16:51,800 --> 00:16:55,160 Speaker 2: of a company's stock without like running into complicated issues 369 00:16:55,200 --> 00:16:58,400 Speaker 2: around trading. Some people do, but it's like often activists 370 00:16:58,400 --> 00:17:00,960 Speaker 2: will sort of cap themselves at nine point nine. A 371 00:17:00,960 --> 00:17:03,640 Speaker 2: lot of activists will run proxy fights owning less than 372 00:17:03,680 --> 00:17:06,600 Speaker 2: nine point nine percent because they're not that huge a 373 00:17:06,680 --> 00:17:09,360 Speaker 2: fund and the company is big, right, Like you have 374 00:17:09,440 --> 00:17:11,720 Speaker 2: you know, like the Engine number one proxy fight at 375 00:17:11,720 --> 00:17:13,720 Speaker 2: Excellent where they own like essentially zero, but you know 376 00:17:13,760 --> 00:17:15,840 Speaker 2: they own a tiny fraction of one percent of the 377 00:17:15,840 --> 00:17:17,720 Speaker 2: company because they were a little hedge fund and xcelln 378 00:17:17,720 --> 00:17:20,399 Speaker 2: A is a giant company, right, and so maybe they 379 00:17:20,400 --> 00:17:22,880 Speaker 2: would have liked to own ten percent, but they didn't 380 00:17:22,920 --> 00:17:24,720 Speaker 2: have that kind of money, and so they owned a 381 00:17:24,720 --> 00:17:27,600 Speaker 2: lot less. It's a lot cheaper to buy votes than 382 00:17:27,600 --> 00:17:29,359 Speaker 2: it is to buy stock. Right. I don't know how 383 00:17:29,400 --> 00:17:31,200 Speaker 2: much cheaper, because it depends on the stock proa costing 384 00:17:31,240 --> 00:17:33,679 Speaker 2: exactly how you structure the transaction, but like, yeah, it's cheaper. 385 00:17:34,080 --> 00:17:36,800 Speaker 2: And so if you are an activist and like you 386 00:17:36,840 --> 00:17:39,720 Speaker 2: are sort of capped out economically at like one or 387 00:17:39,760 --> 00:17:41,600 Speaker 2: two percent of a company, you might want to get 388 00:17:41,640 --> 00:17:43,760 Speaker 2: to ten percent of the company just to win the vote, right, 389 00:17:43,880 --> 00:17:46,280 Speaker 2: just in empty voting. Now that's an interesting case because 390 00:17:46,320 --> 00:17:49,679 Speaker 2: that's like, clearly your motivations there are good, you're just 391 00:17:49,680 --> 00:17:51,760 Speaker 2: buying votes, right, but like you want the stock to 392 00:17:51,760 --> 00:17:53,880 Speaker 2: go up, and you do have economic exposure to the stock. 393 00:17:54,160 --> 00:17:56,399 Speaker 2: The really interesting case is like what if your motivations 394 00:17:56,440 --> 00:17:57,680 Speaker 2: are to tank the stock? 395 00:17:57,760 --> 00:17:57,840 Speaker 1: Right? 396 00:17:57,920 --> 00:17:59,800 Speaker 2: I mean, like I wrote about this and people email me, 397 00:17:59,920 --> 00:18:02,480 Speaker 2: like what if you're actually short, Like you're a short 398 00:18:02,520 --> 00:18:04,480 Speaker 2: seller you want the stock to go down, right, you're 399 00:18:04,520 --> 00:18:07,560 Speaker 2: short one percent of the stock. Why not get long 400 00:18:08,640 --> 00:18:10,760 Speaker 2: eight percent of the stock and short nine percent of 401 00:18:10,760 --> 00:18:12,600 Speaker 2: the stock and you're still net short and you still 402 00:18:12,600 --> 00:18:14,000 Speaker 2: want the stock to go down, But now you have 403 00:18:14,000 --> 00:18:15,520 Speaker 2: eight percent of the votes, you can like mess up 404 00:18:15,560 --> 00:18:17,520 Speaker 2: the voting. Yeah, I don't think there's a ton of 405 00:18:17,560 --> 00:18:20,600 Speaker 2: cases where you can actually do any damage to be 406 00:18:20,600 --> 00:18:22,919 Speaker 2: accompanied by voting. But there are a few, right, The 407 00:18:22,960 --> 00:18:24,919 Speaker 2: one that I thought of immediately is and this is 408 00:18:25,040 --> 00:18:26,679 Speaker 2: hard to do just because of the size, But we 409 00:18:26,760 --> 00:18:30,200 Speaker 2: talked about Elon Musk's compensation vote. We certainly had he 410 00:18:30,280 --> 00:18:33,000 Speaker 2: lost that vote, I think the stock would have gone down, right, 411 00:18:33,040 --> 00:18:34,680 Speaker 2: he might have quit in a huff, Right, this dog 412 00:18:35,040 --> 00:18:37,679 Speaker 2: probably would have gone down. And then if you were short, 413 00:18:37,800 --> 00:18:38,960 Speaker 2: you would have made a lot of money. And so 414 00:18:39,000 --> 00:18:41,240 Speaker 2: if you were short, you know, two percent of Tesla 415 00:18:41,640 --> 00:18:45,119 Speaker 2: and like you got to be short nine percent and 416 00:18:45,160 --> 00:18:48,200 Speaker 2: long seven percent and like messed up his vote, then 417 00:18:48,240 --> 00:18:50,000 Speaker 2: like you might have made some money on it. Now, 418 00:18:50,040 --> 00:18:52,080 Speaker 2: you can't really do that because Tessla's enormous, but there's 419 00:18:52,200 --> 00:18:56,240 Speaker 2: maybe some circumstances where you could be a short seller 420 00:18:56,240 --> 00:18:58,280 Speaker 2: who gets some empty votes to like mess up some 421 00:18:58,320 --> 00:18:59,639 Speaker 2: sort of shareholder vote. 422 00:18:59,720 --> 00:19:03,280 Speaker 1: You know, I'm happy we're talking about this. I feel 423 00:19:03,320 --> 00:19:05,880 Speaker 1: like we're getting closer and closer to talking about close 424 00:19:06,000 --> 00:19:07,439 Speaker 1: end fun proxy fights. 425 00:19:07,640 --> 00:19:08,560 Speaker 2: Oh yeah, I'm sure. 426 00:19:09,240 --> 00:19:12,240 Speaker 1: Gosh, it's just I don't know, the inevitable tug of 427 00:19:12,240 --> 00:19:14,600 Speaker 1: the universe pulling us towards talking we're going to talk 428 00:19:14,600 --> 00:19:17,800 Speaker 1: about close unfund proxy fights, Yeah, anything else you'd like 429 00:19:17,840 --> 00:19:18,120 Speaker 1: to ask. 430 00:19:20,520 --> 00:19:22,320 Speaker 2: The only other thing I'd sad about ant the dding 431 00:19:22,359 --> 00:19:23,919 Speaker 2: is like people say about this all the time in credit. 432 00:19:24,240 --> 00:19:27,320 Speaker 2: In credit, there's a lot more you can do, And 433 00:19:27,400 --> 00:19:30,240 Speaker 2: so you can buy up like fifty percent of some 434 00:19:30,320 --> 00:19:33,040 Speaker 2: series of a company's bonds and be like much more 435 00:19:33,119 --> 00:19:36,000 Speaker 2: short with credit default swaps than you are long bonds, 436 00:19:36,400 --> 00:19:39,080 Speaker 2: and then you can like mess things up and so 437 00:19:39,160 --> 00:19:41,240 Speaker 2: like the classic case, and no one knows if this 438 00:19:41,320 --> 00:19:43,359 Speaker 2: is true for some reason, but like a company called 439 00:19:43,400 --> 00:19:47,600 Speaker 2: Windstream basically like was forced into default by a hedge fund, 440 00:19:47,680 --> 00:19:50,200 Speaker 2: Aurelius that owned a bunch of its bonds and said 441 00:19:50,200 --> 00:19:54,440 Speaker 2: you've defaulted on these bonds, and it was widely rumored, 442 00:19:54,840 --> 00:19:58,280 Speaker 2: never like really fully reported. Was widely rumored that Arelius 443 00:19:58,359 --> 00:20:00,560 Speaker 2: bought a lot of CDs protection and it was net 444 00:20:00,560 --> 00:20:03,480 Speaker 2: short the company's credit, which makes sense because it like 445 00:20:03,480 --> 00:20:05,480 Speaker 2: bottled these bonds, said you're in default, and the value 446 00:20:05,480 --> 00:20:08,080 Speaker 2: of the bonds dropped precipitously. So that's not a good 447 00:20:08,080 --> 00:20:11,320 Speaker 2: trade unless you're also doing something else. But there's a 448 00:20:11,320 --> 00:20:13,600 Speaker 2: lot of like people call it empty creditors, empty voting, 449 00:20:13,600 --> 00:20:16,320 Speaker 2: and credit where you can be more short somewhere else 450 00:20:16,359 --> 00:20:18,840 Speaker 2: and cause a lot of problems with their long position. Also, 451 00:20:18,880 --> 00:20:21,480 Speaker 2: creditors can kind of do more to like cause problems. 452 00:20:21,520 --> 00:20:23,200 Speaker 2: There's only so much to share. Older vote can do. 453 00:20:23,440 --> 00:20:42,000 Speaker 1: Cool empty voting, empty voting voting. All right, Oh, now. 454 00:20:41,240 --> 00:20:42,680 Speaker 2: We're cooking with frozen heads. 455 00:20:43,640 --> 00:20:45,879 Speaker 1: I'm so excited to talk about this. There was just 456 00:20:46,440 --> 00:20:50,919 Speaker 1: a fantastic article in bloom Earth is so talking about 457 00:20:51,119 --> 00:20:54,760 Speaker 1: and interviewing a state attorneys for people who freeze themselves 458 00:20:54,840 --> 00:20:57,240 Speaker 1: and want to be brought back to life. There's so 459 00:20:57,400 --> 00:21:01,600 Speaker 1: many questions that I feel like they can't be answered, 460 00:21:01,680 --> 00:21:03,119 Speaker 1: but they're so fun to talk about. 461 00:21:03,680 --> 00:21:05,399 Speaker 2: Aaron Schilling right of it and says it's like a 462 00:21:05,400 --> 00:21:08,280 Speaker 2: philosophy las hypothetical, and it really is. It's like Derek Parfect. 463 00:21:08,320 --> 00:21:11,439 Speaker 2: It's like it's like if you were cloned, is like 464 00:21:11,840 --> 00:21:15,160 Speaker 2: your new consciousness you or is it somebody else that matters? 465 00:21:15,280 --> 00:21:17,520 Speaker 2: Is like a matter of like legal inheritance. 466 00:21:17,840 --> 00:21:22,760 Speaker 1: Yeah. Absolutely. If you set money aside for two hundred 467 00:21:22,840 --> 00:21:24,879 Speaker 1: years in the future and you're brought back to life, 468 00:21:25,560 --> 00:21:29,399 Speaker 1: is that your money depends on what your trust says exactly? 469 00:21:29,840 --> 00:21:30,920 Speaker 2: But are you you? 470 00:21:31,440 --> 00:21:32,040 Speaker 1: Are you you? 471 00:21:32,359 --> 00:21:36,040 Speaker 2: Because like one argument apparently some kinds of trust, you 472 00:21:36,040 --> 00:21:38,119 Speaker 2: can't get the right tax benefits. You can't be the 473 00:21:38,160 --> 00:21:42,080 Speaker 2: beneficiary of your own trust. And so for some people 474 00:21:42,560 --> 00:21:44,560 Speaker 2: the answer that you want is no, you are not you. 475 00:21:44,600 --> 00:21:46,560 Speaker 2: If you're brought back to life, you're a separate person, 476 00:21:46,760 --> 00:21:49,520 Speaker 2: and therefore you can inherit from yourself. Well all the 477 00:21:49,520 --> 00:21:51,480 Speaker 2: other contracts are you'd want answer to be the other way, like, no, 478 00:21:51,480 --> 00:21:53,080 Speaker 2: I'm the same person, so I get to keep mine. 479 00:21:53,280 --> 00:21:55,760 Speaker 1: I mean, if you freeze your brain, does your soul 480 00:21:55,840 --> 00:21:58,200 Speaker 1: get frozen too when you're reanimated. 481 00:21:58,280 --> 00:22:01,120 Speaker 2: I don't know that your soul like a separate third thing, 482 00:22:01,119 --> 00:22:02,359 Speaker 2: which is like your legal person. 483 00:22:02,880 --> 00:22:06,120 Speaker 1: Right, Well, someone makes care about your soul. Someone makes 484 00:22:06,119 --> 00:22:08,679 Speaker 1: the point in this article one of the state attorneys 485 00:22:08,960 --> 00:22:13,600 Speaker 1: that reversing a death certificate is super complicated. So for 486 00:22:13,720 --> 00:22:16,440 Speaker 1: legal purposes, maybe you should be a different person when 487 00:22:16,480 --> 00:22:17,080 Speaker 1: you wake up. 488 00:22:17,280 --> 00:22:19,359 Speaker 2: Yeah. One thing you learn in law school is the 489 00:22:19,440 --> 00:22:22,600 Speaker 2: rule against perpetuities. Are you familiar with the rule against perpetuities? 490 00:22:24,280 --> 00:22:26,960 Speaker 1: Yes, we're all aware. I mean, I hope of the 491 00:22:27,000 --> 00:22:28,359 Speaker 1: spy kids. 492 00:22:27,880 --> 00:22:30,520 Speaker 2: The spy kids. Right, So the really against perpetuity says 493 00:22:30,520 --> 00:22:34,080 Speaker 2: that certain kinds of trusts, traditionally all trusts can't go 494 00:22:34,200 --> 00:22:36,359 Speaker 2: on forever. There are some places where it can't go 495 00:22:36,400 --> 00:22:38,520 Speaker 2: on forever means they can't last more than one hundred 496 00:22:38,600 --> 00:22:40,960 Speaker 2: years or whatever, which is like a natural thing. But 497 00:22:41,720 --> 00:22:45,800 Speaker 2: the traditional rule is they can't last longer than lives 498 00:22:45,800 --> 00:22:48,400 Speaker 2: in being plus twenty one years, So lives and being, 499 00:22:48,400 --> 00:22:51,480 Speaker 2: I mean, you write some list of specific people who 500 00:22:51,480 --> 00:22:54,399 Speaker 2: are alive today, and when the last of those people 501 00:22:54,440 --> 00:22:56,840 Speaker 2: dies plus twenty one years, that's when your trust has 502 00:22:56,880 --> 00:23:00,280 Speaker 2: to end. And so famously spy, the s you have 503 00:23:00,760 --> 00:23:01,000 Speaker 2: is a. 504 00:23:00,920 --> 00:23:02,959 Speaker 1: Trust, a unit investment trust. 505 00:23:03,000 --> 00:23:07,000 Speaker 2: It's a unit investment trust, and it terminates when the 506 00:23:07,080 --> 00:23:10,080 Speaker 2: last of like it's like what like thirty it's something. 507 00:23:10,119 --> 00:23:12,679 Speaker 1: It's like something like like a dozen dish yeah people 508 00:23:12,920 --> 00:23:14,399 Speaker 1: below twenty Yeah, when. 509 00:23:14,240 --> 00:23:17,480 Speaker 2: The last of them dies twenty one years later, Spy ends, right, 510 00:23:17,800 --> 00:23:20,320 Speaker 2: And like the people they're called the spy kids are 511 00:23:20,359 --> 00:23:22,520 Speaker 2: all they are like the children of like people who 512 00:23:22,600 --> 00:23:25,600 Speaker 2: worked at the at the company, the lawyers lawyers kids. 513 00:23:25,720 --> 00:23:27,119 Speaker 2: Because that's what you do. You try to pick the 514 00:23:27,160 --> 00:23:29,600 Speaker 2: longest life. And so you pick like twelve people, so 515 00:23:29,720 --> 00:23:31,760 Speaker 2: like if one of them dies by a freak accident, 516 00:23:31,800 --> 00:23:33,960 Speaker 2: you still got like eleven more. Yeah, and you pick 517 00:23:34,040 --> 00:23:36,800 Speaker 2: young people because because then like they're likely to live 518 00:23:36,880 --> 00:23:39,560 Speaker 2: longer than if you picked old people. And so that's 519 00:23:39,600 --> 00:23:42,439 Speaker 2: the traditional really insperiputunities. But that doesn't help you if 520 00:23:42,480 --> 00:23:45,560 Speaker 2: you're planning to be reanimated in two hundred years, because 521 00:23:45,560 --> 00:23:50,240 Speaker 2: then everyone will be dead plus twenty one years, everyone 522 00:23:50,920 --> 00:23:54,480 Speaker 2: alive of the time except you, maybe right, because like 523 00:23:54,520 --> 00:23:58,000 Speaker 2: one question is like, if you're reanimated, do you spring 524 00:23:58,080 --> 00:24:00,960 Speaker 2: back to life, and therefore the true springs back to life? 525 00:24:01,080 --> 00:24:01,399 Speaker 1: I don't know. 526 00:24:01,840 --> 00:24:02,280 Speaker 2: I don't know. 527 00:24:02,440 --> 00:24:04,720 Speaker 1: Well, also, I mean looking for into the future, what 528 00:24:04,800 --> 00:24:09,080 Speaker 1: if you set money aside and then you aren't reanimated, 529 00:24:09,119 --> 00:24:11,760 Speaker 1: this never comes to fruition. What happens to the money eventually? 530 00:24:12,560 --> 00:24:15,480 Speaker 1: And at what point do you just someone say, Okay, 531 00:24:15,520 --> 00:24:17,919 Speaker 1: this clearly isn't going to work, let's crack open the 532 00:24:17,920 --> 00:24:18,440 Speaker 1: piggy bank. 533 00:24:18,800 --> 00:24:21,040 Speaker 2: Well, I think that the legal rule is still the 534 00:24:21,080 --> 00:24:23,480 Speaker 2: rules perpetuities. Like I think the answer is, like, you 535 00:24:23,480 --> 00:24:25,719 Speaker 2: know they do this in states where instead of like 536 00:24:25,800 --> 00:24:27,639 Speaker 2: lives and being plus twenty one years, the rule is 537 00:24:27,640 --> 00:24:30,280 Speaker 2: like trust can last for five hundred years, and so 538 00:24:30,880 --> 00:24:33,400 Speaker 2: you set aside money and a trust, and it's like 539 00:24:33,600 --> 00:24:36,000 Speaker 2: if I get reanimated, the money goes to me, and 540 00:24:36,040 --> 00:24:38,600 Speaker 2: if not after five hundred years, that do against the 541 00:24:38,680 --> 00:24:42,000 Speaker 2: charity or whatever, right, but like we'll all be dead. 542 00:24:42,920 --> 00:24:46,760 Speaker 1: I mean, we'll speak for yourself, right exact Apparently. 543 00:24:46,560 --> 00:24:49,639 Speaker 2: Like if you're not reanimated in five hundred years, like, 544 00:24:49,640 --> 00:24:50,480 Speaker 2: no one cares about that. 545 00:24:50,520 --> 00:24:53,720 Speaker 1: If I found out that I had an ancestor who 546 00:24:53,800 --> 00:24:57,480 Speaker 1: left me some money five hundred years ago, right, right, well, 547 00:24:57,480 --> 00:24:58,800 Speaker 1: I'd be psyched about it. 548 00:24:58,640 --> 00:25:01,600 Speaker 2: Contingently, right, like, yeah, your ancestor left some money for 549 00:25:01,680 --> 00:25:05,480 Speaker 2: himself to reanimate his frozen head, and then five hundred 550 00:25:05,520 --> 00:25:07,520 Speaker 2: years later, his frozen he had still not reanimated, and 551 00:25:07,560 --> 00:25:08,720 Speaker 2: it's like, okay, it goes to Katie. 552 00:25:08,840 --> 00:25:11,359 Speaker 1: It's probably kind of gross too, because I, yeah, I 553 00:25:11,359 --> 00:25:15,399 Speaker 1: don't know about this, sure, see, but apparently, by one estimate, 554 00:25:15,680 --> 00:25:20,560 Speaker 1: about five five hundred people are planning for cryogenic preservation. 555 00:25:20,960 --> 00:25:23,600 Speaker 1: That's actually I don't I was going to say that's 556 00:25:23,640 --> 00:25:26,200 Speaker 1: so many people, but actually, in the grand scheme of things, 557 00:25:26,240 --> 00:25:28,000 Speaker 1: that's not that many. I kind of want to be 558 00:25:28,040 --> 00:25:33,200 Speaker 1: one of them, though. If it works, sure, if it works, yeah, 559 00:25:33,400 --> 00:25:37,080 Speaker 1: but eventually we will die, Matt, so you might as well, 560 00:25:37,280 --> 00:25:40,000 Speaker 1: you know, take a gamble on it. I will say though, 561 00:25:40,040 --> 00:25:42,400 Speaker 1: like if my parents were some of these people who 562 00:25:42,440 --> 00:25:45,880 Speaker 1: were like estate planning for their frozen heads, I would 563 00:25:45,960 --> 00:25:46,840 Speaker 1: be so mad. 564 00:25:47,480 --> 00:25:49,600 Speaker 2: It is a little I don't want to say selfish, 565 00:25:49,600 --> 00:25:51,679 Speaker 2: but right, instead of the money going to your air 566 00:25:51,760 --> 00:25:53,440 Speaker 2: as it goes to Maindaniel frozen. 567 00:25:53,119 --> 00:25:55,280 Speaker 1: Head, yeah, I'd be like, I need this now, feel. 568 00:25:55,080 --> 00:25:57,880 Speaker 2: Like the pretty small chance of maybe not small chance 569 00:25:58,200 --> 00:25:59,360 Speaker 2: for some chance of reanimation. 570 00:25:59,680 --> 00:26:02,119 Speaker 1: Yeah, I don't. Actually I have no idea either. I 571 00:26:02,160 --> 00:26:04,520 Speaker 1: did love this quote though in the article This is 572 00:26:04,520 --> 00:26:08,800 Speaker 1: from Mark House. He's an estate lawyer who works in Scottsdale, Arizona, 573 00:26:08,920 --> 00:26:12,800 Speaker 1: and he says the idea of cryo preservation has gone 574 00:26:12,880 --> 00:26:16,960 Speaker 1: from crack pot to merely eccentric, and now now that 575 00:26:17,040 --> 00:26:19,720 Speaker 1: it's eccentric, it's kind of in vogue to be interested 576 00:26:19,720 --> 00:26:22,919 Speaker 1: in it. Eccentric is such an interesting word because that 577 00:26:23,040 --> 00:26:26,080 Speaker 1: is the word that wealthy people use to just say weird. 578 00:26:26,440 --> 00:26:29,399 Speaker 1: You can be eccentric if you have money. If you 579 00:26:29,440 --> 00:26:31,520 Speaker 1: don't have a lot of money, you're just a weirdo. 580 00:26:31,960 --> 00:26:34,119 Speaker 2: Right, and you definitely need a lot of money to 581 00:26:34,600 --> 00:26:35,160 Speaker 2: be excited. 582 00:26:35,160 --> 00:26:39,840 Speaker 1: That money aside for exactly yeah, right. There's also I 583 00:26:39,880 --> 00:26:42,120 Speaker 1: mean there's also the big question of like what currency 584 00:26:42,160 --> 00:26:43,680 Speaker 1: are we going to use in five hundred years? 585 00:26:43,760 --> 00:26:45,840 Speaker 2: Oh yeah, like you wake up and you need money, right, 586 00:26:45,880 --> 00:26:48,280 Speaker 2: and like what if your dollars are worthless? Yeah, put 587 00:26:48,280 --> 00:26:50,479 Speaker 2: in a bitcoin if your bitcoins are worthless, right or like? 588 00:26:50,560 --> 00:26:53,800 Speaker 2: But also like along the way, like presumably there's some 589 00:26:53,840 --> 00:26:57,600 Speaker 2: warehouse that is billing somebody to keep your head frozen. 590 00:26:58,000 --> 00:27:01,320 Speaker 1: Just a warehouse of heads. It's this is just the 591 00:27:01,400 --> 00:27:03,280 Speaker 1: perfect topic. I love this. 592 00:27:04,359 --> 00:27:06,560 Speaker 2: I must say, Yeah, can we talk. 593 00:27:07,080 --> 00:27:12,919 Speaker 1: About my novel? So I am such an egomaniac, like 594 00:27:13,080 --> 00:27:16,199 Speaker 1: I actually believe that I have gold here. I have 595 00:27:16,240 --> 00:27:18,280 Speaker 1: an idea for a sci fi novel. I'll talk about 596 00:27:18,320 --> 00:27:21,119 Speaker 1: it in general terms. Is I really am worried someone's 597 00:27:21,119 --> 00:27:22,679 Speaker 1: going to steal it and write it before I have 598 00:27:22,760 --> 00:27:29,840 Speaker 1: a chance. But it involves blood farming, it involves time travel, 599 00:27:31,000 --> 00:27:34,520 Speaker 1: and I mean there's a lot of ethical questions there. Yeah, 600 00:27:34,720 --> 00:27:37,280 Speaker 1: like to save the human race if you needed to 601 00:27:37,440 --> 00:27:41,320 Speaker 1: like farm people's blood. Is that okay? 602 00:27:41,840 --> 00:27:46,920 Speaker 2: I don't know, Well maybe the financial podcast. I don't know. 603 00:27:48,320 --> 00:27:50,760 Speaker 1: I'm worried I'm gonna get canceled, Like I don't know. 604 00:27:52,560 --> 00:27:53,560 Speaker 2: A farm people's blood. 605 00:27:53,960 --> 00:27:56,359 Speaker 1: I don't want to. But like if you traveled in 606 00:27:56,400 --> 00:27:59,439 Speaker 1: the future and like through the method of travel the 607 00:27:59,480 --> 00:28:03,000 Speaker 1: population was weakened and everyone had bad blood and you 608 00:28:03,040 --> 00:28:07,159 Speaker 1: needed more blood, you know, what would you do? I 609 00:28:07,160 --> 00:28:08,880 Speaker 1: don't know, blood farm. 610 00:28:09,160 --> 00:28:11,560 Speaker 2: Yeah. Science fiction is always like these sort of like 611 00:28:11,800 --> 00:28:16,760 Speaker 2: technological or like societal hypotheticals. But it's like what about 612 00:28:16,760 --> 00:28:21,440 Speaker 2: the lawyers, right, It's like, what are the legal regimes 613 00:28:21,560 --> 00:28:24,200 Speaker 2: applicable to these like science type of I mean, that's. 614 00:28:24,000 --> 00:28:25,919 Speaker 1: The type of world building that you have to do 615 00:28:26,000 --> 00:28:26,840 Speaker 1: in a sign line. 616 00:28:27,080 --> 00:28:30,679 Speaker 2: You need to think about the trust in the states rules. 617 00:28:30,840 --> 00:28:34,439 Speaker 1: I'm reading a book about fairies right now, which is 618 00:28:34,480 --> 00:28:36,680 Speaker 1: just like straight fantasy, and I feel like you don't 619 00:28:36,720 --> 00:28:39,920 Speaker 1: run into these kind of questions as much in fantasy 620 00:28:39,960 --> 00:28:43,120 Speaker 1: that involves fairies and magic because you have magic, where 621 00:28:43,120 --> 00:28:45,800 Speaker 1: a sci fi you know, you have to create a 622 00:28:45,920 --> 00:28:48,440 Speaker 1: world where these rules make sense. 623 00:28:48,720 --> 00:28:50,320 Speaker 2: I often think that you should have more of it 624 00:28:50,360 --> 00:28:53,680 Speaker 2: in fantasy, right, because like the financial implications of like 625 00:28:53,720 --> 00:28:55,960 Speaker 2: having magic, right, what kind of society would you have? 626 00:28:56,160 --> 00:28:58,480 Speaker 1: I guess Harry Potter to try to tackle a lot 627 00:28:58,480 --> 00:28:59,240 Speaker 1: of those questions. 628 00:28:59,360 --> 00:29:01,800 Speaker 2: Some of them I remember had a bank, they had 629 00:29:01,840 --> 00:29:04,680 Speaker 2: a bank. There's like some brief mention in Harry Potter 630 00:29:04,760 --> 00:29:07,360 Speaker 2: that's like there's like some laws of somebody's laws of 631 00:29:07,440 --> 00:29:10,120 Speaker 2: transfiguration where you can't like create food out of nothing 632 00:29:10,240 --> 00:29:12,200 Speaker 2: or something. I forget exactly what it is. There are 633 00:29:12,280 --> 00:29:14,239 Speaker 2: characters in Harry Potter who like don't have a lot 634 00:29:14,280 --> 00:29:16,720 Speaker 2: of money. Yeah, like wizards, and it's like, well, they're wizards. 635 00:29:16,720 --> 00:29:18,240 Speaker 2: They can do whatever, you know, they can like create 636 00:29:18,240 --> 00:29:20,200 Speaker 2: stuff out of nothing. They could create magic, right, so 637 00:29:20,320 --> 00:29:21,680 Speaker 2: like why do they not have a lot of money? 638 00:29:22,000 --> 00:29:24,160 Speaker 2: And there's sort of like a nod in that direction, 639 00:29:24,240 --> 00:29:25,400 Speaker 2: but it's like sort of perplexing. 640 00:29:25,480 --> 00:29:28,320 Speaker 1: So like they can't create food out of nothing, but 641 00:29:28,360 --> 00:29:30,760 Speaker 1: they do have spells that could kill. 642 00:29:30,640 --> 00:29:32,520 Speaker 2: People, right, Yeah, so you could like. 643 00:29:34,320 --> 00:29:37,840 Speaker 1: Yeah, exactly, you could get into gring gods, but then there's. 644 00:29:38,040 --> 00:29:39,920 Speaker 2: Green gods, but like just a regular bank. 645 00:29:39,800 --> 00:29:42,560 Speaker 1: Yeah, or you know, you walk into a shop. 646 00:29:42,640 --> 00:29:44,920 Speaker 2: Right, yeah, take what you want, disappear. 647 00:29:45,160 --> 00:29:45,920 Speaker 1: Yeah, there you go. 648 00:29:46,520 --> 00:29:48,440 Speaker 2: Anyway, right, world building in science section. 649 00:29:48,600 --> 00:29:52,320 Speaker 1: Yeah, anyway, I just feel like I've accomplished everything I 650 00:29:52,320 --> 00:29:54,520 Speaker 1: want to in journalism, So it's time to. 651 00:29:55,120 --> 00:29:57,840 Speaker 2: You've been a TV anchor in the right kound of 652 00:29:57,840 --> 00:29:59,440 Speaker 2: TV anchor for four days. 653 00:29:59,520 --> 00:30:05,400 Speaker 1: Yes, it's over anything else. Who want to say my dog. 654 00:30:05,320 --> 00:30:10,920 Speaker 2: Is really cute? And that was the Money Stuff Podcast. 655 00:30:11,080 --> 00:30:13,040 Speaker 1: I'm Matt Vivian and I'm Katie Greifeld. 656 00:30:13,400 --> 00:30:15,480 Speaker 2: You can find my work by subscribing to The Money 657 00:30:15,480 --> 00:30:17,920 Speaker 2: Stuff newsletter a Bloomberg dot com, and. 658 00:30:17,840 --> 00:30:20,360 Speaker 1: You can find me on Bloomberg TV every day between 659 00:30:20,400 --> 00:30:21,840 Speaker 1: ten to eleven am Eastern. 660 00:30:22,240 --> 00:30:23,959 Speaker 2: We'd love to hear from you. You can send an 661 00:30:23,960 --> 00:30:26,920 Speaker 2: email to you money dot at Bloomberg dot net, ask 662 00:30:27,000 --> 00:30:28,600 Speaker 2: us a question and we might answer it on air. 663 00:30:29,120 --> 00:30:31,240 Speaker 1: You can also subscribe to our show wherever you're listening 664 00:30:31,360 --> 00:30:33,360 Speaker 1: right now and leave us a review. It helps more 665 00:30:33,400 --> 00:30:34,280 Speaker 1: people find the show. 666 00:30:35,000 --> 00:30:37,800 Speaker 2: The Money Stuff Podcast is produced by Anna Maserakus and 667 00:30:37,840 --> 00:30:38,560 Speaker 2: Moses onam. 668 00:30:38,840 --> 00:30:40,960 Speaker 1: Our theme music was composed by Blake Maples. 669 00:30:41,240 --> 00:30:43,960 Speaker 2: Brandon Francis Nunhim is our executive producer. 670 00:30:43,680 --> 00:30:45,880 Speaker 1: And Stage Bauman is Bloomberg's head of Podcasts. 671 00:30:46,120 --> 00:30:48,480 Speaker 2: Thanks for listening to The Money Stuff Podcast. We'll be 672 00:30:48,560 --> 00:30:50,080 Speaker 2: back next week with more stuff