Re: A question about High and Low


Because his creditors are the people who loaned him the money to make the buyout. Not only does the collateral include his personal property and money (excepting immediate cash flow to make the cash for executing the buyout), but it also includes the stock he is purchasing. He is all in - he doesn't get control of the stock until he completes the buy, and he doesn't have additional cash flow until he gets control of the stock.

No way to unload the collateral (his property, his stock) to cover the cash payment. Typicalish for that kind of high-risk loan.

['Moral: leveraged buyouts (and associated tactics) are dangerous to your financial health.']

Posted by: max | Link to this comment | 08-22-11 11:44 PM
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Sorry, but it has been about a year, and I don't have a copy handy.

But wildly guessing, in many cases in Japan the partners or co-investors in a bigger firm like that are banks or holding company-banks (keiretsu), who basically hold "equity" instead of granting "loans" for tax and profit reasons, and are not interested in a) buying more equity, b) selling equity to someone else after a takeover, c) running a company.

Like I said, it has been a long time and I don't remember, and am ignorant of some business practices. But many of even the largest firms were run more like family businesses.

But if part of the plot involved a reputational loss on the part of Gondo, he could not only have trouble selling his share of the company, he would even have trouble selling the assets at a fair price, and his co-owners, though technically owning equity, would be more in a position of creditors demanding he buy back their shares.

I do remember that Gondo, having started making shoes, was of a significantly lower class or social status, possibly even a (closeted?) Burakumin, which historically were the people who worked with leather and other dead things. The firm might be impure.

Posted by: bob mcmanus | Link to this comment | 08-23-11 12:06 AM
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Yeah, that's where I read it.

Amusingly, Tsutomu Yamazaki, who plays the kidnapper in High and Low was the co-lead with Nobuko Miyamoto in several of Juzo Itami's movies twenty years later, and in A Taxing Woman plays the shady subject of her investigations named Hideki Gondo.

Also, Kagawa Kyoko was in High and Low and I had to look that up. Because Kuga Yoshiko was the daughter of a Marquis (2nd only to a Prince) who was disinherited for becoming an actress.

Posted by: bob mcmanus | Link to this comment | 08-23-11 12:31 AM
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but it also includes the stock he is purchasing.

He's purchasing 19%, that's what the loan is for. He already owns 28% when the movie begins.

Posted by: nosflow | Link to this comment | 08-23-11 8:53 AM
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It might be that the 28% he holds is very illiquid in practice, so he can't sell it to pay off his creditors, but that doesn't explain why he's going to be personally ruined - surely his creditors could take part or all of the 28% in collateral and he could at least keep his house.

Posted by: Minivet | Link to this comment | 08-23-11 11:39 AM
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Right, and it doesn't explain why others in the movie refer to him as having nothing but debt.

Posted by: nosflow | Link to this comment | 08-23-11 2:18 PM
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The movie's based on an early Ed McBain novel, King's Ransom if I remember right. It's a great book. The details of the protagonist's situation are pretty different from the film, I'd guess that the screenwriter or translator made up some figures to create an aura of pre-kidnapping wealth and post-kidnapping indebtedness without actually running the numbers.

Posted by: lw | Link to this comment | 08-24-11 10:48 AM
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