Display of ignorance regarding how companies get funds to pay salaries.
If they did indeed pay millions in executive bonuses weeks before filing bankruptcy, those preferential payments will likely be clawed back by the trustee. But the money will go to creditors, not ex-employees.
It is possible that the bonus payments, right before and in knowledge of bankruptcy declaration, should be considered a fraudulent conveyance, and can be clawed back.
Who gets them is another story.
IIRC the normal order of payments priority, short-term creditors get paid first... that is, earned back wages, vendors. Then secured lenders. There won’t be anything left for the stockholders, or at most crumbs.
A severance is not an earned obligation—it’s a kind of employee bonus. It would come at the expense of the other creditors. I don’t think it should happen.
In any event, a few management bonuses spread out over thousands of workers wouldn’t amount to much. It’s the insult that’s got everyone up in arms.
Most employees of bankrupt companies are lucky to get their final paychecks, let alone severance.
Signs posted In window 35 to 50% off all inventory, go inside 5 to 10 percent, all baby items car seats carriages etc 10 percent above walmart and target, same with pier one exports
Stock holders get a small return on bad investments.
Former empoyees are entitled to nothing.
One of my young relatives has worked for them for a year.
Can’t tell from the article, but the executive bonuses may be completion bonuses. An extra $20k or so if they stay with the company until it’s wound down. Keeps them from accepting new jobs before all the loose ends are tied up.
So in reality executives got 8 million worth of bonuses.
Bonuses equal out to about $240.00 per employee for a severance compensation. Bonuses are also taxed at the highest tax bracket, even for peons, so they wind up with about $150.00 bonus.
Cory Booker spends that much for his male hookers each night
Much adu about nothing...
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.
CAPITALIST: - You’ve got some wealth. Now I want to figure out how I can earn some of my own.
SOCIALIST: You’ve got some wealth. Now I want to figure out how to make you give it to me.
What they feel they deserve and what they are legally entitled to are two different things.
However I do see their point about execs getting paid off just before they went belly up, I suspect they are expecting fair play in that if the execs get something, so should they. From this perspective, I would be quite PO’d too.
It’s like the execs got bonuses for making bad decisions that led to the employees layoffs.
Funny...the reason we stopped shopping there was because of the rude, horrible, unhelpful employees.
How much do they wish for per year they work?
The three vulture capitalist owners of Toys’s R Us who bought the company, extracted the cash, and loaded it up with debt were Bain Capital, Vornado Realty Trust, and KKR. All are headed by executives who are significant six figure contributors to Republican PACs and candidates. This may be another reason the Democrat politicians are vocal about this bankruptcy.
Bain and KKR are private equity companies. They are in the business of buying companies and stripping their assets. Private equity firms played a big role in the deindustrialization of the US over the last 30 years, closing factories, outsourcing production, laying off millions of middle class employees, and enriching the managing partners of the firms. The managing partners contribute heavily to the politicians who write the laws than enable them to strip companies of their assets. These politicians also preserve the “carried interest” tax loophole that allows the managing partners to avoid paying high income taxes on their millions of dollars in annual compensation. Trump frequently talked about eliminating carried interest during the campaign but it was preserved in the recent tax bill and since being election Trump has been silent on the issue.
In politics and business, follow the money. The crony capitalists have big money, pay it out to politicians, and reap the benefits. If you believe the GOP is looking after the little guy, read below:
Bain Capital - Mitt Romey’s former company. John Connaughton, Co-Managing Partner (there is no CEO today) was a big donor to Romney’s presidential campaign and Scott Brown’s Senate campaign.
Vornado Realty Trust - Buyer of Kennedy family real estate properties. Steven Roth, Chairman of Vornado, gave $250,000 to the Trump campaign in 2016.
KKR - Run by Henry Kravis. Big donor to RNC, GOP Senators, and GOP Congressmen. He gave $50,000 to Team Ryan in 2016 and $334,000 to the RNC. He gave to John McCain, Lisa Murkowski, Roy Blunt, Chuck Grassley.
Sounds like what happened to me. We all got together and hired a bankruptcy attorney and he got us half our severance plus the money we spent hiring him.
When the chain was alive Toys R Us employees believed they deserved to be able to ignore customers looking for help without being fired.
Today they believe they deserve severance pay after the entire chain has folded.
Intertwined aspects of the situation.
Cue the tiny violins.
Between Bain, KKR and company executives it was a Vampire feast! You can only drain blood from your victim for so long before you kill it.
As far as all the bitching about the service, America switched to the Customer NO SERVICE model long ago and replaced it with bare bones pricing, Most places can’t even be bothered to take your money any more so you ring yourself up and handle the payment for them. I doubt they is a FReeper on here that can claim even 10% of the business they conduct transactions have more that a barely acceptable Costumer Service level.
As far as poor service by front line employees there is plenty of blame to go around. First there’s Management (The one’s getting the big bonuses)they no longer lead they are a lot like parents now days they want to be friends with front line no lead not mentor friends. Its they who no long stress Customer Service the front line are mostly product movers, keep the stuff moving from the back to the front and in dwindling cases take their money and that’s it. And as little customer interaction as possible that cuts down on the on the chances of a faux pas that hits the news of social media.
Here’s your Legos now, go build a better life...