Legal Commentary

What Happens When Your Company Goes Belly Up

By Big Tent Democrat

Earlier this week, I wrote about Jake DeSantis, who quit AIG after the bonus brouhaha. Mr. DeSantis was upset that because AIG went belly up and was propped up by the government, folks were upset with his million dollar bonus (he stated his AFTER TAX bonus was 750k). Perhaps this story can provide Mr. DeSantis some perspective:

A bankruptcy judge on Tuesday tentatively approved Delphi Corp.'s request to stop paying for health care and life insurance benefits for its retired salaried workers . . . U.S. Bankruptcy Judge Robert Drain in Manhattan ruled that the auto parts supplier has a right to change the retirees' benefits under bankruptcy law and that the cuts are justified given the company's dire finances, its troubles finding financing and the overall state of the automotive industry. "It is crystal clear to me that debtor is well within its business judgment in assuming that it will need to eliminate the projected (post-retirement benefits) liability, which is projected at $1.1 billion, in order to reorganize," Drain said in making his ruling.

[More...]

This is what happens when companies go belly up. Compared to the 15,000 Delphi retirees who are going to lose their pension and health care benefits, Mr. DeSantis' whine about losing his million dollar bonus rings hollow.

Speaking for me only

Full post as published by TalkLeft on March 28, 2009 (boomark / email).