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Dennis Donovan

(18,770 posts) Fri Jul 17, 2020, 07:57 AM Jul 2020

On eve of bankruptcy, U.S. firms shower execs with bonuses

https://www.reuters.com/article/us-health-coronavirus-bankruptcy-bonuses-idUSKCN24I1EE

BUSINESS NEWS - JULY 17, 2020 / 7:05 AM / UPDATED 34 MINUTES AGO

On eve of bankruptcy, U.S. firms shower execs with bonuses

Mike Spector, Jessica DiNapoli

(Reuters) - Nearly a third of more than 40 large companies seeking U.S. bankruptcy protection during the coronavirus pandemic awarded bonuses to executives within a month of filing their cases, according to a Reuters analysis of securities filings and court records.

Under a 2005 bankruptcy law, companies are banned, with few exceptions, from paying executives retention bonuses while in bankruptcy. But the firms seized on a loophole by granting payouts before filing.

Six of the 14 companies that approved bonuses within a month of their filings cited business challenges executives faced during the pandemic in justifying the compensation.

Even more firms paid bonuses in the half-year period before their bankruptcies. Thirty-two of the 45 companies Reuters examined approved or paid bonuses within six months of filing. Nearly half authorized payouts within two months.

Eight companies, including J.C. Penney Co Inc and Hertz Global Holdings Inc, approved bonuses as few as five days before seeking bankruptcy protection. Hi-Crush Inc, a supplier of sand for oil-and-gas fracking, paid executive bonuses two days before its July 12 filing.

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On eve of bankruptcy, U.S. firms shower execs with bonuses (Original Post) Dennis Donovan Jul 2020 OP

I went through two bankruptcies from the same employer. Both times the bankruptcy judge doc03 Jul 2020 #1

Just Showing Their Gratitude For Being Able To Stiff Their Debtors And Stockholders, Sir The Magistrate Jul 2020 #2

If my understanding of bankruptcy is correct, if the expenditures weren't for bonuses, no_hypocrisy Jul 2020 #3

doc03

(35,394 posts)

1. I went through two bankruptcies from the same employer. Both times the bankruptcy judge

Reply to Dennis Donovan (Original post)

Fri Jul 17, 2020, 08:19 AM

Jul 2020

approved golden parachutes to the top management. The bankruptcy judge also approved bonuses and raises to
the remaining management because they had to stay and straighten out the company. The company they bankrupted twice!
Us employees went through several rounds of concessions to try and save our job. The company promised to pay those concessions back. Myself I had given up over $80,000 in wages and benefits, I received 13% of that in the settlement. Then when I was 61 the company shut down most operations. Then they said if we would retire early they would pay our health insurance until we were eligible for medicare, one month after that they dropped our insurance. I was lucky since I was eligible for a small PBGC pension
a government program picked up most of the cost of insurance. The entire bankruptcy law is geared to pay off everyone but the
employees that built the company.

The Magistrate

(95,258 posts)

2. Just Showing Their Gratitude For Being Able To Stiff Their Debtors And Stockholders, Sir

Reply to Dennis Donovan (Original post)

Fri Jul 17, 2020, 08:23 AM

Jul 2020

A chance like that, to really fuck up a good many people all at once, doesn't come along every day, and when an executive provides it, shouldn't he or she get a rich reward?

no_hypocrisy

(46,243 posts)

3. If my understanding of bankruptcy is correct, if the expenditures weren't for bonuses,

Reply to Dennis Donovan (Original post)

Fri Jul 17, 2020, 08:53 AM

Jul 2020

they would be barred if they were incurred up to 90 days of the date of filing for bankruptcy.

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