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To: C19fan

Full time employees are entitled to state unemployment compensation. Part time employees may not be entitled to unemployment compensation, it depends on state law and/or hours worked per week.

Executive severance payments and termination bonuses may be based on an employment contract with the company. Sometimes executive contracts provide bonus payments for specific executives to work through the bankruptcy process in order to facilitate an orderly discontinuation of business. Having the CFO, and a few other key operating executives in place to the end may save the bondholders and creditors substantially more money than the continuation bonus payments.

Workers are under a collective bargaining agreement may also be entitled to company payments if provided for in the agreement. Workers employed “at will” are entitled to nothing other than wages for actual hours worked.

It is also possible the executive bonuses were earned in 2017 and paid in 2018 just before the bankruptcy filing. If so the payouts were not an executive “windfall”, they were payments of past compensation earned.

If the executive bonuses were extraordinary one time payments, authorized and paid knowing a bankruptcy filing was imminent, there will be litigation by the creditors and the payments will almost certainly be clawed back by the courts. The banks, the investment firms holding the bonds, and suppliers owed money for goods have teams of lawyers and accountants pouring over the books and assets. Improper payments to management will be an item they will explore and challenge in bankruptcy court.


19 posted on 06/03/2018 5:47:32 AM PDT by Soul of the South (The past is gone and cannot be changed. Tomorrow can be a better day if we work on it.)
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To: Soul of the South
Having the CFO, and a few other key operating executives in place to the end may save the bondholders and creditors substantially more money than the continuation bonus payments.

Yes, but those arrangements should be brought before the bankruptcy court for approval after filing.

Bottom line, however, is that I don't have enough information to opine as to whether anything improper occurred, or not.

25 posted on 06/03/2018 5:55:25 AM PDT by PAR35
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