Connect with us

Top News

On eve of bankruptcy, U.S. companies shower execs with bonuses

Published

on

On eve of bankruptcy, U.S. firms shower execs with bonuses

(Reuters) – Approximately a third of more than 40 huge providers in search of U.S. individual bankruptcy security in the course of the coronavirus pandemic awarded bonuses to executives in just a month of submitting their situations, in accordance to a Reuters investigation of securities filings and courtroom documents.

FILE Photograph: A Neiman Marcus division retail store stands up coming to vacant parking lots at the King of Prussia Shopping mall which stays shut due to the ongoing outbreak of the coronavirus disorder (COVID-19) in Upper Merion Township, Pennsylvania U.S., Could 21, 2020. REUTERS/Lucas Jackson/File Picture

Beneath a 2005 bankruptcy regulation, businesses are banned, with several exceptions, from shelling out executives retention bonuses while in bankruptcy. But the firms seized on a loophole by granting payouts ahead of filing.

Six of the 14 corporations that approved bonuses in just a thirty day period of their filings cited enterprise challenges executives confronted in the course of the pandemic in justifying the compensation.

Even much more corporations paid out bonuses in the 50 percent-yr period of time in advance of their bankruptcies. 30-two of the 45 providers Reuters examined authorised or compensated bonuses in just 6 months of filing. Approximately fifty percent licensed payouts within two months.

8 firms, together with J.C. Penney Co Inc and Hertz International Holdings Inc, accredited bonuses as couple as 5 times right before in search of bankruptcy defense. Hello-Crush Inc, a provider of sand for oil-and-gasoline fracking, paid govt bonuses two days just before its July 12 filing.

J.C. Penney – compelled to briefly shut its 846 office merchants and furlough about 78,000 of its 85,000 workforce as the pandemic unfold – approved nearly $10 million in payouts just before its May possibly 15 submitting. On Wednesday, the firm explained it would completely close 152 retailers and lay off 1,000 workers.

The company declined to comment for this story but stated in an before statement that the bonuses aimed to retain a “talented administration team” that had produced progress on a turnaround just before the pandemic.

The other firms declined to comment or did not respond. In filings, quite a few reported economic turmoil had rendered common payment designs obsolete or that executives acquiring bonuses had forfeited other compensation.

Luxury retailer Neiman Marcus Team in March quickly closed all of its 67 shops and in April furloughed a lot more than 11,000 personnel. The corporation compensated $4 million in bonuses to Chairman and Main Government Geoffroy van Raemdonck in February and far more than $4 million to other executives in the months before its May 7 personal bankruptcy submitting, court information present. Neiman Marcus drew scrutiny this week on a approach it proposed soon after submitting for individual bankruptcy to shell out further bonuses to executives. The corporation declined to remark.

See also  North Korea: South Korea's Unification Minister offers to step down amid worsening fights

Hertz – which a short while ago terminated additional than 14,000 employees – paid senior executives bonuses of $1.5 million times just before its May well 22 personal bankruptcy, in element to figure out the uncertainty they faced from the pandemic’s affect on travel, the organization reported in a submitting.

Whiting Petroleum Corp bestowed $14.6 million in excess payment to executives times prior to its April 1 bankruptcy. Shale pioneer Chesapeake Electricity Corp awarded $25 million to executives and decreased-degree workers in May, about 8 weeks before submitting individual bankruptcy. Both equally cited fallout from the pandemic and a Saudi-Russian oil rate war, which they explained rendered their incentive strategies ineffective.

Reuters reviewed fiscal disclosures and courtroom documents from 45 corporations that filed for bankruptcy concerning March 11, the working day the Earth Health and fitness Business declared COVID-19 a pandemic, and July 15. Making use of a databases presented by BankruptcyData, a division of New Generation Investigate Inc, Reuters reviewed firms with publicly trade stock or personal debt and much more than $50 million in liabilities.

This kind of bonuses have very long spurred objections that organizations are enriching executives whilst reducing positions, stiffing creditors and wiping out stock buyers. In March, creditors sued former Toys ‘R’ Us executives and directors, accusing them of misdeeds that incorporated paying out administration bonuses days right before its 2017 bankruptcy. The retailer liquidated in 2018, terminating additional than 31,000 folks.

A lawyer for the executives and directors stated the bonuses have been justified, specified the further function and stress on management, and that Toys ‘R’ Us experienced hoped to keep on being in small business right after restructuring.

In June, congressional Democrats responded to the pandemic-induced wave of bankruptcies by introducing laws that would reinforce creditors’ legal rights to claw again bonuses. The bill – the newest iteration of a proposal that has very long failed to obtain traction – faces slim potential clients in a Republican-controlled Senate, a Democratic aide explained.

See also  In Aden Yemen, coronavirus mortality rates are worse than war deaths

Firms paying pre-bankruptcy bonuses know they would confront scrutiny in court on compensation proposed immediately after their filings, said Clifford J. White III, director of the U.S. Trustee Program, a Justice Department division billed with checking bankruptcy proceedings. But the trustees have no electrical power to halt bonuses paid out even days ahead of a company’s personal bankruptcy filing, he claimed, permitting corporations to “escape the transparency and courtroom overview.”

DODGING Bonus Limitations

The 2005 laws needed executives and other corporate insiders to have a competing position present in hand right before receiving retention bonuses throughout personal bankruptcy, among other limitations. That pressured failing corporations to devise new methods to pay back the bonuses, according to some restructuring authorities.

Just after the 2008 monetary crisis, corporations usually proposed bonuses in individual bankruptcy court, casting them as incentive programs with goals executives have to fulfill. Judges mainly accepted the strategies, ruling that the general performance benchmarks place the payment further than the purview of the restrictions on retention bonuses. The programs, however, sparked objections from Justice Office screens who known as them retention bonuses in disguise, generally with straightforward milestones.

Sooner or later, firms found they could keep away from scrutiny completely by approving bonuses ahead of individual bankruptcy filings. Dozens of providers have authorized these types of payouts in the final 5 years, explained Brian Cumberland, an government compensation specialist at consulting firm Alvarez & Marsal who advises providers going through economical restructurings.

Corporations argue the bonuses are very important to retaining executives whose departures could torpedo their corporations, finally leaving significantly less money for creditors and employees. Now, some organizations are bolstering all those arguments by contending that their company would not have cratered with out the financial turmoil of the pandemic.

The pre-bankruptcy payouts are desired, providers say, mainly because possible stock awards are worthless and it would be extremely hard for executives to fulfill enterprise targets that ended up crafted in advance of the financial disaster. The bonuses guarantee balance in management that is wanted to maintain faltering functions jointly, the companies contend.

Some experts argue the bonuses are tricky to justify for executives who could have couple better work choices in an financial crisis.

“With double-digit unemployment, it’s a peculiar time to be paying out retention bonuses,” stated Adam Levitin, a professor specializing in individual bankruptcy at Georgetown University’s law school.

See also  An indigenous village in Peru where 80% of people have symptoms of Covid-19

Shut Suppliers, Big BONUSES

J.C. Penney has not posted an once-a-year earnings considering the fact that 2010 as it has struggled to grapple with the change to on the net buying and competitiveness from lower price vendors. The 118-12 months-previous chain, at various details, used much more than 200,000 individuals and operated 1,600 merchants, figures that have considering that been slice far more than 50 %.

On Could 10, J.C. Penney’s board approved payment changes that paid out prime executives, together with CEO Jill Soltau, almost $10 million. On Might 13, Soltau gained a $1.7 million long-time period incentive payment and a $4.5 million retention bonus, court filings present.

The annual pay out of the company’s median staff, a portion-time hourly employee, was $11,482 in 2019, a organization filing displays.

J.C. Penney filed for bankruptcy two days just after paying Soltau’s bonuses. At a hearing the next working day, a creditors’ lawyer argued the payouts have been built to thwart courtroom critique. The payouts had been timed “so that they didn’t have to set it in entrance of you,” reported the lawyer, Kristopher Hansen, addressing U.S. Personal bankruptcy Decide David Jones.

Jones – who is also overseeing the Whiting Petroleum, Chesapeake Energy and Neiman Marcus scenarios – informed Reuters that such bonuses are “always a concern” in individual bankruptcy instances. “That explained, the adversarial approach demands that get-togethers place the concern in advance of me prior to I can choose motion,” he additional, emphasizing he was talking of common dynamics applicable to any case. “A comment designed in passing by a attorney is not ample.”

Slideshow (2 Illustrations or photos)

In its assertion before this yr, J.C. Penney said the bonuses had been among a collection of “tough, prudent decisions” taken to safeguard the firm’s foreseeable future.

Dennis Marten – a shareholder who explained he once labored at a J.C. Penney retail outlet – disagrees. He has appeared at court docket hearings pleading for an investigation of the company’s leadership.

“Shame on her for obtaining the gall to get that revenue,” he said of Soltau.

Reporting by Mike Spector and Jessica DiNapoli Editing by Brian Thevenot

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Top News

Portuguese football player mourns Fernando Chalana | About UEFA

Published

on

Portuguese football player mourns Fernando Chalana |  About UEFA

Fernando Chalana was one of the most outstanding players in Portuguese football, he represented Benfica for 13 seasons and also played for Bordeaux, Belenenses and Estrela da Amadora. Between 1976 and 1988, he played 27 times for the national team, scoring two goals, saying goodbye to the Quinas shirt in a friendly match between Portugal and Sweden (0-0) on October 12, 1988.

Chalana had an impact on the Portuguese national team that played in the 1984 European Championship final, even finishing in the top 11 of the tournament.

President of the Portuguese Football Federation Fernando Gomes left a message of condolences in connection with the death of Fernando Chalana, which occurred on Wednesday.

“It is with deep sadness that I mourn the death of Fernando Chalana, Portugal player and eternal leader of Benfica.

The “little genius” spread magic and art across the football fields, delighted the fans with his imagination, aroused the admiration of all sports fans and was deservedly elevated to the category of idols.

Chalana was undoubtedly one of the best players in the history of our football and his name made Portugal stand out in the world. I especially remember his performances at the European Championships in 1984. With his disappearance, Portuguese sport and football lost their mythical connection.

Chalana, a respected player on the field and by all football fans, was a man of exceptional qualities.

I leave words of comfort to my family and friends during this difficult time. To Benfica, I express my deepest condolences.”

Continue Reading

Top News

Portugal: discrimination against Brazilians is growing – 08/09/2022 – World

Published

on

Portugal: discrimination against Brazilians is growing - 08/09/2022 - World

“Brazilian citizenship” was the main reason given in discrimination complaints filed in Portugal in 2021, accounting for 26.7% of the total 408 complaints received by the Commission for Equality and Against Racial Discrimination (CICDR).

While overall, the number of complaints of discrimination in the country decreased by 37.7% compared to 2020 (655) and by 6.4% compared to 2019 (436), reports specifically against Brazilians increased. In 2021, 109 complaints were received for this reason, and in 2020 – 96; growth by 13.5%.

The jump is especially pronounced compared to 2017, when there were only 17 registrations. However, in the same year, the total number of discrimination complaints was also much lower, at 179 complaints. The data is part of the country’s latest Annual Report on the State of Racial and Ethnic Equality and Non-Discrimination, released quietly by the Anti-Discrimination Commission on Tuesday (9).

According to the document, the expressions “Gypsy nationality” with 67 complaints (16.4%) and “Black/black/black/black race” with 65 complaints (15.9%) are expressed “with significantly lower values”.

The more general expression “foreigners/foreigners/immigrants in general” comes in fourth place with 18 complaints (4.4% of the total) “corresponding to cases in which the victims felt they were discriminated against for being foreigners, immigrants or non-migrants”. who are Portuguese citizens. , we are not talking about a crime against a specific nationality.

In 2021, legally residing Brazilians made up about 30% of the nearly 700,000 foreigners living in the country, according to data from the SEF (Service for Foreigners and Borders), in 2021 — partial data released by the agency on Tuesday showed that the country’s community continued to grow. .

See also  Robert O'Brien cut the National Security Council staff

In Portugal, depending on the specifics of the case, episodes of ethnic and racial discrimination can be classified as a crime or a so-called misdemeanor, a lesser crime. This is how most registered offenders are classified, resulting in lighter penalties. These episodes are analyzed by the CICDR, which has autonomy and decision-making authority.

“CICDR has the power to make decisions and impose fines [multas] and additional sanctions in the framework of administrative offenses. But such decisions can always be challenged in court. Sometimes yes, sometimes no,” explains Pedro Barosa, Partner at Abreu Advogados. In 2021, the Commission issued only two sentences, one fine and one warning (a kind of public warning).

A survey carried out by the Combat project of the Center for Social Studies (CES) of the University of Coimbra analyzed data on discrimination from 2006 to 2016 and showed that about 80% of cases initiated by the Commission for Equality and Against Racial Discrimination end up being shelved. A guilty verdict was handed down in 7.5% of cases. However, in appeals overturning or contesting these decisions, convictions are reduced to 5.8%.

According to José Falcao, leader of the NGO SOS Racismo, several convictions in Portugal mean that, in practice, crimes of racism in the country go unpunished. “The law does absolutely nothing to combat racial discrimination. This law in its current form is useless,” he says, citing the case of MP Andre Ventura, leader of the far-right Chega party.

See also  An indigenous village in Peru where 80% of people have symptoms of Covid-19

CICDR fined the parliamentarian 3,770 euros (19,700 reais) for comments that were deemed discriminatory against Roma ethnicity on a Facebook page, but Ventura filed an appeal and the court acquitted him.

According to Falcao, the difficulty in exposing cases of discrimination often begins at the police stations, when the police still routinely dissuade complainants.

In an interview with Sheet In July, Parliamentary Affairs Minister Ana Catarina Méndez said the Portuguese government was investigating complaints that already pointed to an increase in discrimination, but stressed that the increase was also due to migrants’ greater awareness of the issue. which leads to more complaints.

Psychologist Cynthia de Paula, president of Casa do Brasil in Lisbon, a non-governmental organization that provides assistance to the Brazilian community, also believes that immigrants are becoming more attentive. We have received more messages [de discriminação]but I think a larger denunciation movement has also been created,” he said.

In this sense, in addition to increasing racial debate in some parts, the very characteristics of the new wave of Brazilian migration to Portugal may contribute to a greater willingness to openly discuss complaints of discrimination. This group, which is more active and includes many students, professionals and entrepreneurs, has formed groups and associations and used social media to raise awareness of the issue.

This topic was especially discussed in the country after the great resonance of racist insults made by a Portuguese woman. against the children of Brazilian actors Giovanna Eubank and Bruno Gallasso. The case took place on July 30 in a restaurant in Costa da Caparica, near Lisbon. The woman was arrested but later released by the police.

See also  Craig Ferguson cut the price of the Craftsman compound to $ 4.2 million

The couple’s press service states that the aggressor “asked them to leave the restaurant and return to Africa, among other absurdities pronounced to the children as“ dirty blacks ”. The actors wrote a statement to the police. The Ministry of Industry and Trade confirmed that they had launched an investigation into this case.

Continue Reading

Top News

“The Portuguese coach has the ability to adapt quickly”

Published

on

"The Portuguese coach has the ability to adapt quickly"

PAulo Fonseca couldn’t have dreamed of a better start to the French Championship, beating Auxerre 4-1.

in an interview provided by the official media of Lillethe Portuguese coach explained what philosophy to apply in the French club this season.

“My philosophy is to have the ball. Dominate games. Make the team play the ball with great dynamics. With a strong reaction when we lose the ball. It’s hard for me when I feel like the team doesn’t have the ball. … be the protagonist of the game and I like to dominate. I have to know what to do with the ball. I have to know how I can find the right moments and spaces to attack,” Paulo Fonseca began.

“Sometimes I pay special attention to central defenders. Not because I was a fantastic player, but because I wasn’t. But I know how they feel at certain moments in the game. Sometimes I pay more attention to some details. went through those moments and those details,” he added.

The coach also named 4-2-3-1 as his preferred tactical system: “It’s a system that we can use against any other system. However, the system is something static only at the beginning of the game. everything is different. It depends on the dynamics of the team. It depends on the movements you want from the team. For me, the initial system is not the most important. More than that, it’s team dynamics.”

When asked what coaches inspired him in his career, Paulo Fonseca pointed to the Portuguese without hesitation.

“Many Portuguese coaches inspire me. I have many names in several fields that inspire me a lot. We have a good coaching school. The federation with this president changed football in Portugal a lot. So many Portuguese coaches around the world. We have the ability to adapt to different countries and different styles of play. I think the Portuguese coach has this ability to quickly adapt to different circumstances,” Paulo Fonseca said, calling Guardiola “an inspiration”. “It’s the best in the world,” he concluded.

See also  Discounted home for $ 300,000 in Riverside County

Read also: Lille de Paulo Fonseca starts with everything in the new edition of Ligue 1

Always be the first to know.
6th year in a row Consumers Choice and Five Star Award for Online Press.
Download our free app.

Apple Store Download

Continue Reading

Trending