Matt Levine’s Money Stuff: The Endless Shrimp Investigation

Ultimate endless shrimp

Here is a hypothetical move:

1. You are in the business of producing and selling shrimp.
2. You expand vertically by acquiring a chain of seafood restaurants.
3. The restaurants start to struggle and are heavily indebted, and you worry that your equity investment is losing value and possibly worthless.
4. How to cut your losses?
5. Well, you have two relationships to the restaurant chain: You own the equity, and you also supply the shrimp.
6. Not much you can do with the equity: There’s a lot of debt, the creditors rank ahead of you, and they are unlikely to let you take any ...