Fairholme's Buffett-Like Deal with AmeriCredit

That was one phase of what we did. The other phase was to make it easier for the company, to help them de-lever a bit we took some of our senior debt and exchanged it for new equity in the company in order for them to strengthen their equity base.

We liked the company ahead of time. I feel good, I'm on the board.

Michael: That is sort of more of an old school sort of Buffett-esque type of deal. More of a partnership type of thing where you have a mutually beneficial situation for the next couple of years. They get liquidity, you get a little...

Bruce: And this is also really where it's important we have good management. For example, United Rentals will eventually have to do something, but they stopped us. They basically gave us a bit of a poison pill change, lowering the amount of equity we can buy. The trick to a highly leveraged company is shrink, use the cash, de-lever, either by exchanging debt for equity or even buying debt back at a significant discount. And then when the economy picks up they'll be just fine.

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