Major Corporations Using Bankruptcy Loophole After Issuing HUGE Bonuses With Bailout Funds

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Published on 1 Aug 2020, 18:00
Via America’s Lawyer: Corporations like J.C. Penney issued massive bonuses to company executives just before filing for bankruptcy. Mike Papantonio & Farron Cousins discuss.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Major corporations are filing bankruptcy to avoid COVID losses, but not before handing their CEOs massive bonuses. Wow. What an ugly, disgusting story. Now this, this takes me back to 2008, right? Where we didn't prosecute anybody. We let these banksters these thugs, these, these absolute sociopaths, steal gazillions of dollars. Eric Holder, who was the attorney general refused to prosecute them. The, the, that administration Obama comes in and saying, we have to do something about these corrupt bankers. Remember that?
Yeah.
He ran on that and nobody's prosecuted. As a matter of fact, nobody was even thoroughly investigated. Jamie Dimon comes out looking like a hero. Isn't this a repeat of that where the COVID case is concerned?
Well, absolutely, because at that same time back in 07 and 08, you had these executives with their tails between their legs, walking into Congress, begging for money. We, we've screwed up. Everything is horrible, but we're too big to fail. Give us money. They essentially made the same argument when they were lobbying for these COVID bailouts, which they got far more than anybody else. And so now we're finding out that even though they got the money, they still decided let's file for bankruptcy protection. But according to bankruptcy law, if you file for bankruptcy protection, you can't issue bonuses. So they said, well, we're going to file for bankruptcy. But first CEO, here's $5 million. Here's your bonus. Now we file for bankruptcy and lay off everybody.
Okay. The bankruptcy judge can do something about this if, if they want to.
Right.
They can say it was fraudulent. You've got situations where you got companies this was called high crush, inc. It was a supplier of sand for oil and gas fracking. They, they give this bonus to these folks like two days, big bonuses, big bonuses. The CEO's not the people actually work out there, but they give these big bonuses two days before they declared bankruptcy. JC Penney did the same thing, $10 million worth of bonuses.
And 80,000 people lost their jobs with JC Penney.
Yes, yes. Whiting petroleum, $14 million. Chesapeake energy, $25 million. So they're spreading all of these bonuses around. Now in bankruptcy, there is something called preference and that is, if you move money away from what should be a bankrupt fund, then you can pull that bank back in. But the laws, the laws give these CEOs a lot of wiggle room.
Well, they do and one of the things that Obama did do, and actually, no, this was back in 05 they did it, this was under the Bush administration, is they put in a loophole that said, you can only give a retention bonus because that's what they like to call these at the end of the year. You did such a good job, we're giving you $25 million, so you don't leave us. So they changed the law and said, well, you can't do a retention bonus unless of course you have an offer from another company. And then it's okay. That is how for a long time, they were getting around a lot of these loophole or a lot of these, these bonus laws. And that's an important part of it too, because they realized by doing these little tricks, by working with other companies and saying, we need you to act interested in our CEO. We need you to reach out and make a pathetic offer to one of our people that you have no intention of doing so we can legally. We'll do it for you. You do it for us. It's the same kind of criminal activity.
It's the same. Okay, more importantly, it's the same bailout. Don't you see.
Yeah.
The feds are not giving this money in comparative. They're not giving this money to people who can't pay their rent. They can't buy food for their family.

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