Corporate bankruptcy

[KingsGambit]

From an ethical perspective, is it moral for a company facing bankruptcy to pay out millions in bonuses to departing executives while declining to pay any form of severance for hourly employees?

[guacamole]

I once heard such an executive say that if they weren't paid thusly, then all the executives would abandon the company en masse creating an even bigger mess than bankruptcy. I suppose we could try keeping executives who run companies into the ground a bit more accountable.

[Darth Executor]

I once heard such an executive say that if they weren't paid thusly, then all the executives would abandon the company en masse creating an even bigger mess than bankruptcy. I suppose we could try keeping executives who run companies into the ground a bit more accountable.

Often executives come in to try and save a dying company and make sure they have solid contracts before tying their name to a sinking ship that may well be impossible to save.

If worker severance bonuses are an issue they should simply require corporations to actually have the funds they owe their employees at all times, possibly held by a different dedicated legal entity.

[Sparko]

welcome back Darth.

I think they should set aside money for the employees.

[Cow Poke]

Often executives come in to try and save a dying company and make sure they have solid contracts before tying their name to a sinking ship that may well be impossible to save.

If worker severance bonuses are an issue they should simply require corporations to actually have the funds they owe their employees at all times, possibly held by a different dedicated legal entity.

In escrow.

[Cow Poke]

From an ethical perspective, is it moral for a company facing bankruptcy to pay out millions in bonuses to departing executives while declining to pay any form of severance for hourly employees?

Do the employees have anything in their employment contract that includes or references a severance package?

And, you kinda use "ethical" and "moral" in the same.....

[Cow Poke]

And this comes to mind

Scripture Verse: Matthew 20

[b]

© Copyright Original Source

[mikewhitney]

If companies have to do escrows for severance pay, as a general business practice, companies would have to hire fewer people and would have a harder time staying functional. in effect, non-BK businesses would be harder to start and operate in order to be prepared for bankruptcy.

It may be possible to regain severance pay through an appeal to the BK court. Also, late payments to executives may be called back -- which I can safely say since it is April 1.

[Cow Poke]

If companies have to do escrows for severance pay, as a general business practice....

That, of course, depends on whether there was any "severance pay" stated or implied. In most employment contracts, the employee is just as free to quit without penalty as the company is to terminate them without penalty. In fact, there is much more burden on the company than the employee.

[mikewhitney]

http://theintercept.com/2019/03/25/g...severance-scam
This article would indicate that bankruptcy was an option from the time of the original purchase of Gymboree. There could be reason to pierce the corporate veil so as to collect severance pay that was promised but not given.