This doesn’t work in practice due to typically severe time constraints. You cannot expect a business that has 6 days of life left to wait for such an approval process. These things never happen fast.
What M&A are you familiar with that they can typically happen in a 6 day timeframe?
I know this is already a stressed straw man in the first place but M&A are aren't a short simple process anyway. Adding some oversight isn't going to change that.
Yes there are tradeoffs to more regulation vs total anarchy/free market. That doesn't mean they're not worth it. "Good" is not the enemy of "perfect" and all.
They don't necessarily need to complete the acquisition in a week, just get the broad details negotiated and agreed to. Given the GP's bankruptcy example, if they thought it was worth the risk the acquirer can extend a bare minimum amount of credit to keep the company alive while they do the rest of due diligence and finish the acquisition, folding it into a breakup fee.
> What M&A are you familiar with that they can typically happen in a 6 day timeframe?
Virtually every single bank failure that happens results in an M&A that is negotiated over a weekend.
Most recently Credit Suisse collapsed in March. UBS bought it on Monday, March 19, after negotiations began on Friday, March 16. UBS offered a price that was 60% lower than the Friday closing price. The deal was accepted.
Interestingly in this case an "approval" similar to the one we are talking about did happen over that weekend didn't it? I think the approvers brokered the deal.
Regulators were concerned about a collapse causing contagion that results in a financial crisis. Would they care to do that for a little startup with a few dozen employees?
> You cannot expect a business that has 6 days of life left to wait for such an approval process.
A homeless man that has 6 hours left to live in the cold winter often cant get shelter, because instead we are really concerned with caterting the entire fabric of society to fictiontion problems that might one day affect a mismanaged business.
Admittedly, I read the other comment as a whataboutism. This explanation seems to help.
I think one could argue that the business failure is likely to affect more people, therefore it’s a greater impact. Still, I ultimately agree with this stance (in the context of business survival, not personal); failure is an inherent risk of business.
Agreed. The number of people affected is a big difference. But I think the comparison does make clear that isn’t necessarily a principled reason not to accept a few failures as part of otherwise useful regulation.
A "few failures as part of otherwise useful regulation" sounds an awful lot like some innocent victims exists, treated as guilty.
Treating the (presumed) innocent as though guilty, by regulation even, doesn't sound all that good. In fact, seems there in fact are profound and relevant principles to not accept that.
The context in this discussion is comparing the hypothetical of a homeless person dying due to a systemic failure to the hypothetical of a business going bankrupt (without being acquired) due to a systemic failure.
This concept of presumed innocence ought to apply to this hypothetical homeless person: why not give them shelter (analogous to allowing M&A) by default, until someone decides it’s a problem? If a society is willing to accept this personal death, they should be willing to accept a business failure.
