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December 12th, 2007, 11:46 AM #1Does anyone else understand this? Company goes BK, elects pay raises for remaining
My wife worked for a nice size company for almost 10 years. She was released late this summer with no advance notice and no health care coverage, along with almost 6000 other employees.
There are around 1000 other employees that remain with the company after the bankruptcy filing. The BK judge approved pay raises for the remaining employees and also approved paying $9 million in Executive bonuses.
Does anyone else see what is wrong here?
The employees who worked for the company on the lower levels (and didn't know about the demise till the final 2 days before the doors closed), get screwed and the upper level execs who probably made the decisions to get the company into BK, get rewards?
Nice. My wife is still waiting on vacation pay while the rich get richer. How about the other prior employees- of some which are still jobless. Is this fair to them? Many still had vacation pay due to them for the year. It would at least provide closure to the whole deal for them.
December 12th, 2007, 12:04 PM #2
- Join Date
- January 18th, 2005
It actually makes sense, in a perverted sort of way. Once bankruptcy is filed, the judge's (and trustee's) only goal is to maximize the value that can be paid to debtors. Keeping the "key leadership" intact is often perceived as important to maintaining the company so that it can be sold or restructured -- even if this is the same leadership that sank the company into bankruptcy.
Once a company filed for bankruptcy, any competent manager is going to circulate their resume and seek more stable employment, so often the only way to retain these folks is to offer raises. Apparently the bankruptcy world thinks bonuses achieve the same benefits, though I certainly don't agree.
Naturally, the "lower layers" of management and staff are not considered as valuable by the bankruptcy trustee or management, as they are considered easily-replaceable cogs in the corporate machine. Of course, this is often untrue, and in some cases the loss of just a few "low-level staff" turns out to be the end of a company, if they had crucial knowledge or performed the real work that provided value.
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