Clearwire May Skip Big Debt Payment – Stealing?
The Wall Street Journal recently published an article about the Clearwire Corporation as they are contemplating skipping a very large debt payment that is due Dec. 1st. You can view the article HERE.
The business is not yet profitable and is consuming large amounts of cash. The debt payment of $237 million would dramatically reduce the amount of cash that is available to operate the business moving forward, to the point where they would possibly be at risk of running out of cash sometime in the next 12 months.
They have a 30 day grace period during December, so the fact that they don’t pay on Dec. 1st is not a default. At the end of the grace period the debt goes into default, at which point in time bankruptcy and other possibilities could become part of the discussion.
Questions the CEO is facing are: a.) Do I pay the debt when it’s due at the end of the month? b.) Do I use the grace period? or c.) Do I go into default all together?
The key points from a pure business viewpoint are a.) Do I have leverage to negotiate against this lender to get better terms so that I preserve cash to preserve the company? b.) Can I raise new cash during the grace period so that I don’t go into default, in which case I could pay my debt? or c.) Do I just pay and scramble?
The 8th commandment viewpoint (thou shall not steal) is very clear– when we make a commitment, we are to honor that commitment. The downside of making that commitment falls on our shoulders not on the shoulders of the lender. In other words, the lender is looking for payment due at the end of the month which was the commitment. The company has the resources to meet that commitment. The Wisdom books of the bible have a number of passages that speak on this topic. (i.e. Psalms 37:21, Proverbs 22:7)
From the Center’s viewpoint, the biggest problem in this business analysis is that it functions under the presumption that God does not exist. The Center would encourage us to start with the fact that it is God’s world, and that He has the capacity to meet a company’s needs as well as an individual’s. This is why the 8th commandment stands as a principle; because God can cover our needs while we should honor our commitments.
Questions:
1. What 8th Commandment concerns does this situation raise?
2. What courses of action would you suggest?
3 Responses to “Clearwire May Skip Big Debt Payment – Stealing?”
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I like what the writer quotes “From the Center’s viewpoint, the biggest problem in this business analysis is that it functions under the presumption that God does not exist.” I think that is the most poignant reason for the downfall of capitalism, politics and especially and especially society. So the question is, how/where/to what extent beyond prayer are we willing to go to get His message out to CEO’s who don’t believe. Leadership, responsibility, faith, education and congregation are all missing in these core societies. Simple Christian courses like ALPHA are great for re-introducing biblical application to any part of ant society, including and especially corporate.
Sorry for the misspelled and double type. I thought I proofread, obviously not !
An excellent point that needs to be grasped beyond our immediate Christian communities. We live in a culture where “money rules” and “cash is King” – false assumptions, according to Haggai 2:8!