But the interest rate at which a company borrows depends not just on the risk of default, but also on the "recovery value" in the case of default (i.e., how much do creditors end up with after the company has been wound down).
Lawyers involved in those cases said the bankruptcy filings would delay their proceedings while the bankruptcy courts decide how much each creditor should be paid.
Each of the firm's creditors knew about its own dealings with Long-Term Capital, but none had any idea how much money other creditors had lent the firm, or how the money was being used.
Figuring out the value of those transactions would help determine how much money some creditors are owed.
Ryder is confident that the local council will agree to his proposed Company Voluntary Arrangement (CVA), which will stipulate how much money club creditors will receive.
The filing did not specify how much money each creditor was owed.
In a week when the United States contemplates how long its future will be spent deep in debt, they also hint at how much its greatest creditor is pinning its own hopes of building wealth on dreams.
As the law and economics scholars Richard Hynes and Eric Posner have found, when consumer ignorance is "severe enough" there's "a limit to how much explaining a creditor can do before losing the attention of its customers".
