Huang He was initially unwilling to accept this plan, but he couldn't afford to fall out with Hastings. Moreover, with many other matters at the time, Huang He genuinely lacked the energy to haggle with Netflix. In the end, he agreed to the plan and lent Netflix $400 million.
As it turned out, Hastings' decision was incredibly sound. Even though $280 million of that $400 million loan was due last year, Huang He never asked Netflix for the repayment. After all, it was his own company. If he had forcibly demanded the money back, the company would have been unable to repay it and would have had to declare bankruptcy, which would have been self-defeating.
Therefore, despite the debt being long overdue, Huang He hadn't chased the payment until this lawyer's letter arrived.
It was time for Netflix to repay the money.
"What exactly does Huang He want!" Hastings locked himself in his office, pondering for an hour, yet still unable to fathom Huang He's intentions.
"Forget it. Huang He must be trying to use this debt to force me to submit, but I will never yield. At worst, I'll sell off company assets to repay the debt!" A new idea struck Hastings.
Since there was debt, he would sell assets to pay it off. The company building, copyrights, technology—all of it could be sold, and the proceeds used to settle the debt.
What's more, he could seize this opportunity to sell the company's algorithms at a low price. In Hastings' view, Netflix's algorithms were worth at least over $100 million, but he could easily sell them to Magic Deal for a mere few million dollars.
After all, algorithms were just data, with no tangible assets. Thus, one could claim the data was worth millions or worthless, and legally, there would be no grounds for complaint.
With this thought, Hastings suddenly felt cheerful again. He had discovered another excellent way to hollow out Netflix and fill his own company's coffers.
"Hmph! This money is meant to repay your Jiangnan Group's debt, so no one can fault me for my actions!" A faint smile appeared on Hastings' face. "Moreover, I can use the excuse of repaying your money to sell off company assets, but I don't actually have to repay the money. Instead, I can use it to acquire offline assets. I want you, Huang He, to get nothing and just watch Netflix turn into a pile of dung. In the end, to save Netflix, you'll have to inject billions more dollars!"
Hastings' thoughts grew more ambitious and joyful until his secretary rushed in again, her face pale, and told him, "President, we just received a letter from the court. The court has accepted our bankruptcy application, and the company has officially entered bankruptcy proceedings!"
"What!" Hastings shot up from his seat, staring at the secretary in utter disbelief, stammering, "What nonsense are you talking about? How could we go bankrupt? When did I ever submit a bankruptcy application to the court?"
"It wasn't us who submitted it, it was PwC and Huang He! It turns out that PwC's visit a few days ago to investigate our financial data was not to look for embezzlement, but to gather sufficient financial evidence to prove that our company no longer has enough funds to repay its debts. Then, the controlling shareholder could directly use these documents to apply for bankruptcy without our company's involvement!"
"Huang He!" Hastings shouted, his vision darkening before he collapsed. The panicked secretary quickly called for a doctor, and after a lengthy resuscitation effort, Hastings finally regained consciousness.
However, upon waking, Hastings wished he could have fainted again immediately because he finally understood the purpose behind Huang He's recent actions.
Hastings had always believed that Huang He's moves were merely to pressure him into submission, forcing him to hand over control of the company and leave, just as he had done to Randolph back then.
This was because Hastings had never imagined that Huang He would be willing to let Netflix go bankrupt.
This mindset had led Hastings into a miscalculation. Just as he had suddenly realized that remaining in his position at the company was more effective, for Huang He, letting Netflix simply go bankrupt was not an unacceptable option.
Indeed, while Netflix's bankruptcy would bring many complications, resulting in a massive loss of business and users, and would even lead to an auction where the entire company would be broken up and sold off piecemeal, there was a silver lining for Huang He.
If Netflix went bankrupt, all existing shareholders would be out, and the company would undergo an auction. The funds raised from the sale would be used to repay creditors.
In this scenario, Huang He's 60% stake and Hastings' 40% stake would both be forcibly divested and auctioned. From this perspective, Huang He seemed to suffer a greater loss of shares.
However, the issue was that because Netflix had never lacked funds, it had no history of borrowing from external parties. Its only creditor was Huang He.
Therefore, if Netflix went bankrupt, Huang He, as the sole creditor, could simply state his willingness to exchange the debt for all of the company's shares and effortlessly acquire them all!
Even if Hastings disagreed, there was nothing he could do. Since Huang He held the majority of the shares, the decision of whether to sell the company, whom to sell it to, and at what price was entirely up to Huang He. Hastings had no say in the matter, as he only possessed operational rights, which became worthless once the company went bankrupt.
In summary, if Netflix went bankrupt, it would enter liquidation proceedings, and Huang He, as the sole creditor, would have the priority to negotiate with Netflix regarding the debt.
As the largest shareholder of Netflix, Huang He could immediately approve the debt negotiation and offset all of Netflix's debts with the total amount of over $380 million owed.
In this way, Huang He, as the creditor, could smoothly acquire all of Netflix's shares. It would be a simple transaction of moving assets from one hand to another, making Netflix entirely Huang He's property. Huang He would gain complete control of Netflix and all its assets, while Hastings would be unceremoniously ousted, receiving nothing.
Since these bad debts were originally meant to be repaid through Netflix's profits and not by any other entity, Huang He would not suffer any financial losses. The only potential loss would be that Netflix might have to suspend operations for three months to handle the debt processing.
However, this was not guaranteed. After directly declaring Netflix bankrupt, if the controlling shareholder and the creditor reached an agreement, Netflix could continue operating under temporary trusteeship. In that case, Netflix might only cease operations for two or three days before resuming.
Although this would prevent Netflix from implementing any policy changes and would require it to operate based on its existing momentum, this was hardly an issue. As long as Netflix could continue to operate, it would be able to develop continuously.
Well, if everyone finds the above difficult to understand, let's summarize it in one sentence:
If Netflix goes bankrupt, it will all belong to Huang He. Hastings will leave with nothing, and Netflix will only have to bear the cost of a three-day suspension of operations.
At this moment, Hastings felt completely devastated. Did he still want to wake up? He felt it would have been better to remain unconscious, to live in his dreams.
But since he was awake, sitting idle was not Hastings' style. He immediately picked up his phone and contacted some of his friends, preparing to borrow money!
That's right, after much deliberation, borrowing money was the only way for Hastings to break through this crisis. As long as Hastings could find a way to borrow hundreds of millions of dollars to repay Netflix's debts, he could completely escape the looming bankruptcy crisis, and Netflix would remain his.
At the very least, borrowing tens of millions of dollars would give Netflix several more creditors. This way, during Netflix's bankruptcy restructuring, Hastings could gain leverage through these creditors.
This would prevent Huang He from having absolute control in the creditors' meeting solely because he was the only creditor, leaving Hastings with no room to intervene.
Unfortunately, Hastings made several phone calls. As soon as they heard that Hastings wanted to borrow money, regardless of how close they usually were, they immediately found excuses to refuse or simply hung up the phone.
Even when Hastings explained his objective—that it was a strategic borrowing and the money would definitely be repaid in the future—it was all to no avail.
What a joke. Who would lend money to a company that was already on the verge of bankruptcy? It would be like throwing money into a cesspool!
As for the technical aspects of borrowing mentioned by Hastings, while they sounded plausible, who knew if it was all a lie to trick them into losing their money? There were plenty of scammers like that on Wall Street, and who would risk their own money on such a venture?
Even if everything Hastings said was true, if their money went into the company, it would take months, if not years, to sort things out. If this money were used elsewhere, it could at least generate over 30% in profits!
But lending it to Hastings would yield no benefit whatsoever. What kind of idiot would do that?
People are always willing to add to someone's prosperity rather than offer help in times of need. This is the truth of the world's development, and it will never be wrong!
After countless failed calls, Hastings finally had to dial the number of an elder, hoping the elder would agree to help him. After all, for this elder, a few hundred million dollars should have been a trivial matter.
"Don't you have tens of millions of dollars yourself?" To his surprise, the elder's secretary answered the phone and directly told Hastings, "The company isn't run by us. Lending money requires a lot of procedures and takes a lot of time, which is very troublesome. So, we advise Mr. Hastings to first put in your own tens of millions of dollars in personal assets. This way, you can also gain bargaining power in the bankruptcy restructuring! At the very least, you can pay the interest and delay it for a few months!"