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Tue May 5, 2020, 09:24 AM

Can't lay off for next 6 months because of terms of bailout, but then, look out

These coronavirus job losses will be permanent, CNN Business, 5/5/20

... The airline (United Air Lines) is precluded from laying off staff for the next six months under terms of a US bailout that will provide it with about $5 billion, but it's preparing to cut staff as soon as October, according to a letter sent to staff in April by CEO Oscar Munoz and President Scott Kirby.

(I don't know if this applies just to United Air Lines, or several air lines, or many companies in many industries, so maybe I'm making too much of this paragraph on second thought. )

This too is interesting: why we may be seeing relatively few bankruptcies so far (heck, I haven't seen that much more than we typically see in normal times. Same too as far as local restaurants -- Twin Cities -- closing permanently, yeah we've had a few, but we're always seeing a few closings in a 3 million population metro area).

Some retailers may be too broke to file for bankruptcy

Some retailers can't afford to file until stores reopen because they need money from liquidation sales, my CNN Business colleague Chris Isidore reports. The "everything must go" blowouts help get products off shelves and fund operations through bankruptcy proceedings.

"We probably would have seen more file by now if stores were open," Reshmi Basu, an expert in retail bankruptcies at Debtwire, told Chris. "We're clearly seeing a lot of companies engage [bankruptcy] advisors. But it's not a great time."

The article goes on to mention some retailers opening -- but I don't think liquidation sales under current condtions -- curbside pickup / delivery only, people still wary of going anywhere they need to go -- will work out well. So they might have to wait a few months, if they can.

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Reply Can't lay off for next 6 months because of terms of bailout, but then, look out (Original post)
progree May 2020 OP
sop May 2020 #1
TreasonousBastard May 2020 #2

Response to progree (Original post)

Tue May 5, 2020, 09:28 AM

1. Just in time to kick off the presidential campaign.

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Response to progree (Original post)

Tue May 5, 2020, 09:46 AM

2. "Some retailers may be too broke to file for bankruptcy"...

Why, then, should they?

Bankruptcy provides a way for a company to build itself back, or to go out of business in an orderly way, without buzzards picking over its bones. And, of course, requires many expensive court filings and $1,000 an hour lawyers.

It also, of course, preserves some pay and benefits for those who ran the place into bankruptcy. This may be its primary attraction, along with strategic bankruptcies to stick it to specific claimants and ward off other lawsuits.

But, without these perks, what is wrong with allowing the buzzards to pick the bones? You have no money, so you don't pay the mall rent, you don't pay your suppliers, your employees, your bankers, your taxes, and anyone else you owe money to. You simply quietly disappear, your corporation dissolves and anything of value is auctioned off. Claimants then divvy up the proceeds.

This does happen in real cases, and without in personem liability everything just goes away and you walk off with the money in your pocket and wherever you have hidden it.

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