Thread by @TheStalwart

In this whole debate about airline bailouts, I think people made a false choice between two options:

Bailouts: Which would theoretically save jobs and shareholders

Chapter 11: Wipe out shareholders, but maybe the government steps in to preserve jobs post-reorg

1/

The second option (Chapter 11) holds a lot of appeal to people because it in could punish executives for taking on too much financial risk. While at the same time, theoretically preserving employment, which many people agree is a worthwhile aim of government policy 2/

But it seems like there's a third choice:

You don't bail out the shareholders, but then executives do everything possible to avoid Chapter 11, including mass layoffs and liquidations, trying to hold onto control of the company. Which of course would make sense for them to try 3/

It seems like it's less about avoiding bankruptcy, but about avoiding option 3, which would have the worst ramifications for the economy as a whole, as thousands of people more lose their jobs, while today's shareholders/management try to maintain their stake in the company /4

So the best option then is to find a way to fund the airlines in a way that they see as superior to the alternative of slash costs to the bone in an attempt to stay solvent.

Anyway, curious what the pro-Chapter 11 crowd of @chamath @hblodget @bgurley see of this framing.