Cherry Picking before bunkrupcty?

helgus1 · April 10th, 2006, 7:20 am

Hi,what exactly mean the "cherry picking" according to a company that is going to bust?rgds,Matt

danturner999 · April 10th, 2006, 2:35 pm

It means they pick which contracts to honour...i.e. Bank A has 2 contracts with Bank B, on one of them they are making money and on the other they are losing.If Bank A then goes bankrupt, they 'cherry pick' the contract on which they are making money and force Bank B to honour it... they however, chose not to honour the other contract in which they are losing.Bank B has no choice but to honour the payment or they themselves will be called into default.Hope that helps.

helgus1 · April 10th, 2006, 3:32 pm

Yep, that helps.I was considering exectly something like this.thanks