Companies paid $165 million in bonuses before going bankrupt
Chuck E. Cheese, Hertz and J.C. Penney are among the many companies that paid millions of dollars in bonuses to their top executives before their corporate bankruptcy filings. Each company paid a bonus to their top executives last year before they declared Chapter 11 bankruptcy. Other companies on the list include Neiman Marcus, oil companies like Whiting Petroleum and Chesapeake Energy. The Government Accountability Office (GAO) found in a new report that all 42 companies spent billions of dollars in so-called "retention" bonuses in the days that led up to their bankruptcies. Michael Clements, GAO's financial markets director said in a GAO podcast, "These companies paid bonuses totaling $165 million anywhere from five months to as little as two days before the company filed for bankruptcy."
The awarding of retention bonuses right before filing for Chapter 11 bankruptcy shoes that the U.S. bankruptcy code needs fixing. The change would involve amending the bankruptcy code rule that Congress passed 15 years ago. The Bankruptcy Abuse Prevention and Consumer Protection Act passed in 2005 limits the debtor companies' ability to give out worker retention and executive bonuses without a bankruptcy judge's blessing. The bankruptcy rule does not however regulate what a company can or cannot do before it files for bankruptcy.
Source: CBS News
The awarding of retention bonuses right before filing for Chapter 11 bankruptcy shoes that the U.S. bankruptcy code needs fixing. The change would involve amending the bankruptcy code rule that Congress passed 15 years ago. The Bankruptcy Abuse Prevention and Consumer Protection Act passed in 2005 limits the debtor companies' ability to give out worker retention and executive bonuses without a bankruptcy judge's blessing. The bankruptcy rule does not however regulate what a company can or cannot do before it files for bankruptcy.
Source: CBS News
Category
Inclusion, Equity &
Organizational &
Emergency Response
Inclusion, Equity & Diversity
Performance Management
Open Enrollment
Gender Identity
Policies & Practices
Raise
Leadership Development
Bonuses & Incentives
Investigations
Hiring
Workplace Harassment
Whistleblowing
Employment Branding
Parental Leave
Retaliation
Data Security
Job Applications &
Communicable Diseases
Compensation & Benefits
Sexualy Harassment
Sexual Orientation
Employee Resource Groups
Ethical Practice
Benefits
Privacy
Technology
Remote & Hybrid Work
Employee Relations
Payroll
Workplace Stories
Leadership &
Paid Leave
Flexible Spending Account
Workers' Compensation
Risk Management
Onboarding
Retirement Benefits
Organizational Structure
Age
Opening & Closing
Career Development
Change Management
HR Software
Business Continuity
Wellness Benefits
Electronic Records Management
Cybersecurity
Tags
Article
Tips for Staffing Agencies to Create a Competitive Advantage
Today, it is a $174 Billion industry and one of the leading B2B businesses in the US. Whenever HR p ...
10 Tips to Help You Ace an Online Interview Amidst COVID-19 Crisis
Online interviews have been rising in popularity for quite some time now. It has increased by 49% s ...
How to Cope with America’s Return-To-Office Plans
If you’re looking forward to shifting from remote to in-office work, here are a few ways to cope wi ...
Is It Time For Recruiters To Think Like Marketers?
About 46% of recruiters acknowledge this by seeing recruitment more as marketing than an expansion ...
Comments