It's not an issue if you're tracking the cash flow of the business or it's overall viability regardless of ownership structure. These book losses are just recognizing that the business has a higher market value so their ownership dilution commitments reduce the present value of the company more.

Reasonable people can believe they have a legitimate ownership right when they petition YouTube for copyright enforcement for AI-generated work. The courts might eventually disagree, but that's a different thing than knowingly making a fraudulent misrepresentations to YouTube for financial benefit. This difference makes the proposed behavior criminal fraud. I highly recommend not risking twenty years of prison time for like maybe a couple hundred dollars in ad revenue.

You actually can, so long as it's the best offer for the other creditors. So long as you can come up with sufficient cash for the minority creditors you're entitled to dispose of the asset in any way you see fit. The Pennsylvania families came up with the cash (via The Onion's cash offer and structuring the payout).

Correct, it was given up by the majority creditors in exchange for non-monetary considerations (specifically, the moral victory of having The Onion own Infowars).

> It was basically an IOU from one of the families

This is fine, people are allowed to act against their own financial interests. That's one thing that having ownership means is that you can ruin the thing you own for any or no reason. The court has zero reason to intervene if a majority creditor is giving up their own share of the proceeds for any or no reason.

> There was also no transparency in the bidding. It should have been a simple auction, to get the maximum amount of money.

This is a non-issue, the trustee was given wide latitude to dispose of the assets in any way he deems fit.

It's a chapter 7 bankruptcy, the bankruptcy estate already owns the infowars assets.

> There are rules around this process for a reason. If you allowed someone who has a debt judgement to just take over a company what is it's true value. Alex could try to value infowars at a trillion. So they put it up for an auction to get the real value. That's the fairest way for all cases.

Specifically, the reason is protecting minority and junior creditors (including the debtor when assets are in excess of debts). If nobody offered up enough cash to pay off the debts in full and there is only one creditor who would rather have the business than the best cash offer, I don't think there'd be any reason for the courts to object. The big issue is, again, minority creditors getting less than their "fair share" of the assets, along with over-compensating senior claims with junior ones outstanding.

Neither are at issue here - The Onion's offer paid more cash to the minority creditors, the majority creditor opted into the deal, and the assets are clearly worth less than the debts.

The other creditors get more cash from The Onion's offer. It was specifically structured to give better-than-next-offer remuneration to minority creditors.

The exception to this is currency: if you're fairly paid with stolen money, you get to keep the money, regardless of whether the rightful owner is able to proof that it was originally theirs and stolen.