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Politics : Mainstream Politics and Economics -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (50094)	8/2/2013 7:16:32 PM
From: i-node	Read Replies (3) \| Respond to of 85487

>> if union worker contract(negotiated by a CEO) put a company into BK then screw the workers This isn't complicated. The idea of a bankruptcy proceeding is very straightforward: The company needs to be able to show it is viable. If the unions are the reason the company is in bankruptcy, they have to be curtailed. (That's the reason Obama's corrupt action in the GM bankruptcy was so outrageous; it didn't solve the company's problem -- it merely guaranteed GM will be back in Chapter 11 at a future date. But the Court could not possibly have looked past the fact that creditors were willing to give up their rights and give the unions their interests. Of course, it was necessary to overlook the fact that Obama was holding a gun to their heads -- which wasn't a matter for the bankruptcy court to involve itself in.) >> But the CEO should get a bonus for his mismanagement... If the CEO is truly responsible for the bankruptcy, he has a ton of exposure - including numerous forms of personal liability, some of which can end up bankrupting him personally, as well (I once had a client who was merely the accountant for a company in bankruptcy, and he ended up personally liable to IRS for unpaid withholding taxes in the millions of dollars under the 100% penalty provisions). If the CEO has truly mismanaged the business the CEO is probably not going to lead the debtor-in-possession. The job is involved and the CEO's role is quite different from the way it is in a normal business. If the unions aren't shown to be a problem the union employees may be unaffected. But in large companies with lots of union involvement, unions are typically a significant part of the problem. In those instances, the unions have to suffer. It is kind of useless to discuss this stuff with you because you're always going to favor unions and hate on the CEO, no matter what. Sometimes bankruptcy occurs because of no one thing; and in all cases, the idea is to find a way to make the business viable again. If that can't be worked out, a liquidation is probably in order.

To: Broken_Clock who wrote (50094)	8/3/2013 11:39:12 AM
From: TimF	1 Recommendation Recommended By i-node Read Replies (1) \| Respond to of 85487

He was posting about a CEO signing on for taking the company through the bankruptcy, that would not be likely to be the old CEO, at least not if the old CEO clearly made the mistakes that lead to the bankruptcy. The old CEO will get paid according to his contract (unless he's shown to have violated it), until and unless the process of the bankruptcy changes that. The same applies to benefits the union negotiated for its members.