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Comment by chi3 | Hacker News Reader

Working at one of the top 5 members of that clearing house in Scandinavia, very few people I've spoken to about it at work earlier this week thinks he is actually bankrupt. He's filing for bankruptcy so that he won't have to cover his own loss.

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Is that even possible under Norwegian law? To my understanding, Aas has been trading as a private individual, meaning not through an LLC (an AS in Norwegian terminology). If the rumors I'm hearing are correct, this was in order to avoid publishing his trades and profits, which he would have been required to do if he was trading through an AS.

Personal bankruptcy is a very pietistic, convoluted procedure in Norway. It requires giving up all your assets and surrendering all of your income (above a sustenance limit) to creditors for five years, and can only be done once in your life. If Aas is going this route, he will not be able to save any owned assets from the proceedings, and will more or less consent to being a debt slave for the next half-decade. That's an extreme measure that people only do when there is no other option. (The default option being to just not pay anything and leave creditors hanging indefinitely, with the expected consequences for any personal financial endeavor in the future).

So at most this is a play to negotiate with creditors, if the understanding I have is correct. There would be no way to save any assets if actual bankruptcy is the chosen move.

You seem to know a lot about this, though, given that you work with this. Are there some facts here that I'm not aware of?

Would this cover assets not directly owned by him, or assets owned abroad etc ? some loophole which would allow him to retain some chunk of his wealth?

While it likely that it is negotiation tactic, it has to believable one for creditors to think he may actually follow through, otherwise there is no point.

I am aware of no such loopholes. Foreign assets can of course be hidden from the authorities, but they will be confiscated if discovered. Any shares in companies or properties will be confiscated and liquidated, as will any payouts from life insurance policies and such. (Unless I'm very mistaken, all income counts).

As will any primary residence if it has a higher standard or price than the sustenance minimum, any vehicles not required to perform work, any household items beyond a minimum of ~$10k or so in value. It's quite harsh.

If married, the spouse can keep 50% of any assets that were jointly owned.

> this was in order to avoid publishing his trades and profits, which he would have been required to do if he was trading through an AS

Are you sure about this? This sounds very weird. I understand that you might be required to public your annual profits, but an actual trade list?

I don't think there's a requirement to publish a list of the actual trades performed, but I get the impression that the reporting requirements are more detailed than just a profit/loss number.

For private individuals, the only public piece of information that will be reported is the amount of tax paid, and the net assets of the individual.

I thought a bankruptcy procedure is about distributing the remaining assets to creditors in an orderly and fair way. How can this prevent him from losing his assets?

You're mostly right, but there's probably laws governing exactly what assets are redistributed to the creditors. Maybe he is able to stash some assets with his wife or in some complex offshore setup. You'd need lawyers to say. Or the bankruptcy court even.

There was recently a high court judgment in Norway with Alexander Vik who refused to pay for a large currency trade. He tried for years not to pay and even moved his values over to his family, but at the end he lost in court and the money was claimed from his relatives.

https://www.forbes.com/sites/nathanvardi/2014/03/05/the-ridd...

He might have put a subset of his assets in a foundation, which is not included in bankruptcy (as he no longer owns the assets -- the foundation does).

Foundations however, have no owners (generally only beneficiaries), so they often cannot be held liable for the debts of the (original) founders.

This is one of the big perks of HN - real topics often come with added insights from involved players.

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