Birds of a Bankruptcy Feather?

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It looks like at a minimum, Donald Trump isn’t planning on making much hay of Hillary Clinton’s speech ties to Goldman Sachs. Why? Well, Trump’s new national Finance Chair, Steven Mnuchin, is a longtime Goldman Sachs executive who spent 17 years at the firm.

But more notably, to paraphrase Austin Power’s Dr Evil, Mnuchin seems to share with Trump a penchant for bankruptcy.

According to this article in Variety, Mnuchin headed out to Hollywood to produce movies after Goldman Sachs. But last Fall things got ugly when his film studio, Relativity Media tumbled into bankruptcy late last year. But that’s not all. Apparently the other investors who lost their shirts when they learned that a bank tied to Mnuchin managed to draw out $50 million dollars for the company in the weeks just prior to the bankruptcy filing in July.

Here’s what Variety had to say about it last fall

But Variety has learned that the former Relativity co-chairman quietly resigned his board post at the film- and TV-maker on May 29, because of what a source close to the company said was the potential for a conflict of interest between his duties at OneWest (which just days ago was bought out by CIT Group of New York) and Relativity.

Mnuchin’s departure from the board two months ago is unlikely to appease creditors, who are owed hundreds of millions of dollars by the insolvent studio and who are fighting to recover at least some of what they’re owed for their loans or bills for services. The chances of getting much cash are dim, experts say, with Relativity’s liabilities standing at nearly $1.2 billion and its assets at just $560 million.

Bankruptcy courts are empowered to block unfair “preferences” — payments to individuals or companies shortly before a Chapter 11 filing that inappropriately give favored treatment. And two individuals who had studied the $50 million in payments to OneWest Bank argue that the lender was given a clear preference when it drained two of the few flush accounts Relativity controlled, as others went unpaid.

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