Category Archives: Bankruptcy

The Boy Scouts bankruptcy case crossed an important milestone on Sept. 29, 2021, when Judge Laura Selber Silverstein approved the Boy Scouts statement that explains its plan to exit bankruptcy. That statement includes a proposal for compensating the tens of thousands of people who filed claims attesting that they were sexually abused while participating in the Boy Scouts programs. Survivors now get a chance to vote on the Boy Scouts exit plan. But for the Boy Scouts to exit bankruptcy and continue operating, the judge must sign off on it.

The Boy Scouts filed bankruptcy in February 2020 in the wake of lawsuits publicly exposing the decades-long sexual abuse of Scouts, with the intent to use bankruptcy to set up a fund to compensate survivors. The Boy Scouts plan to exit bankruptcy includes settlements with insurance companies, the Church of Jesus Christ of Latter-day Saints, which previously funded scouting activities, the Boy Scouts and its local councils. These settlement deals total almost US$1.9 billion.

The roughly 250 local councils will contribute $500 million, and the national umbrella organization, the Boy Scouts, will put in up to $320 million. Insurers and the Church of Jesus Christ of Latter-day Saints will collectively contribute a bit under $1.1 million. If the plan is approved, the settlement will prohibit further lawsuits against the Boy Scouts and its local councils.

For the judge to approve the Boy Scouts plan, a majority of the nearly 82,000 survivors who filed claims in the bankruptcy case and businesses owed money by the Boy Scouts that is, its creditors must vote in favor of it. The survivors will receive ballots and informational packets by mid-October. Survivors must return the ballots by Dec. 15, 2021. The votes will be tallied by Jan. 4, 2022. The judge has scheduled a hearing on Jan. 24, 2022, to consider the results of the voting and whether to approve the Boy Scouts bankruptcy exit plan.

Abuse claimants face a tough decision. Throughout the bankruptcy case, survivors and their attorneys have called out the Boy Scouts for neglecting to protect children for decades and instead shielding abusers. The committee that represents abuse survivors as a whole in the bankruptcy case has counseled survivors to reject the plan and has stated that the plan is grossly unfair. In contrast, attorneys separately representing tens of thousands of abuse claimants have encouraged survivors to vote in favor of the plan because they believe it is the best possible outcome.

In addition to voting in favor of or against the plan, the ballot that survivors will receive requires them to choose between two options for payment. They can get an expedited distribution payment of $3,500, with almost no questions asked. Or they can choose to go through an evaluation process of their abuse claim. If they choose the process, survivors will receive amounts based on the severity of the abuse they suffered and other criteria. Based on the criteria, a survivor could receive as little as $3,500 or as much as $2.7 million.

The Boy Scouts membership has plunged in recent years, decreasing by 43% from about 2 million in 2019 to 1.1 million in 2020. The decline is partly due to the publics growing awareness of the alleged widespread molestation of Scouts and the Boy Scouts decades-long cover-up of the abuse.

There likely are other causes, such as the COVID-19 pandemic, the Boy Scouts battles over the inclusion of LGBTQ individuals and the Church of Jesus Christ of Latter-day Saints decision in 2019 to pull its 400,000 members from the Boy Scouts to start its own youth program.

Every time there is news from the case, the Boy Scouts history of turning a blind eye to the abuse is put on display again. As the case continues, churches and other organizations that historically have hosted Boy Scout troops and events may think twice about continuing their relationships, especially if they worry about their own liability for the abuse suits.

Approval of the Boy Scouts plan and settlement will finally close this chapter of the Boy Scouts history. This may allow the Boy Scouts to focus on rebuilding its programs, maintaining relationships with churches and other organizations, and forging new relationships.

A possible outcome of the hearing scheduled in January 2022 is that the judge does not approve the plan. This might happen for several reasons. Not enough abuse survivors or other creditors may vote in favor of the plan. There also are a few elements of the settlement that the judge still must consider before signing off.

If the judge does not approve the plan, the Boy Scouts bankruptcy case will continue. The Boy Scouts will return to negotiations with insurers, abuse survivors and others to try to craft another settlement agreement and bankruptcy exit plan. This outcome could make the bankruptcy case drag on even longer.

Each survivors decision about how to vote is their own. Although survivors can seek guidance from their attorneys, the decision ultimately must be made by each of them. In bankruptcy, voting on the plan is the moment when everyone has a voice.

Abuse survivors finally have the chance to have their voice heard. They have the power to tell the Boy Scouts, through their vote, how they feel about how the Boy Scouts has responded to a deluge of abuse claims and the price tag that has been attached to their pain.

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Sexual abuse survivors are voting on the Boy Scouts bankruptcy settlement: 5 questions answered - The Conversation US

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DENVER A Colorado company that promised to help clients get out of their timeshare and offered a money-back guarantee has filed for Chapter 7 bankruptcy.

The Timeshare Termination Team filed for bankruptcy at the end of September, stating the business has about $10,000 in assets, including desks and office chairs. Bankruptcy documents filed with the court say the company has an estimated $25 million in liabilities, it also shows the company pulled in $2.2 million in gross revenue from Jan. 1 until the filing date.

A letter sent to former clients states, "No property appears to be available to pay creditors. Therefore, please do not file proof of claim now."

The owners of the company, Brian and Holly Wilbur, have also filed for Chapter 11 bankruptcy.

"Any hope of getting any funds from them, no matter how little they would be, was basically gone," said Rob Dines, a former client.

Dinges said he hired Timeshare Termination Team in January of this year in hopes of terminating his timeshare in Mexico's Playa del Carmen. He said the company even sweetened the deal by offering him a discount. He signed a contract and ended up paying $2,995, then he waited.

"I think it was in August, I decided, well, maybe I better check again, see whats going on," Dinges said. "All the phone numbers I had, when I called they were all disconnected, no longer in service. So then I went online and Googled them."

During his online search, he found stories from Contact Denver7 showing the business had closed its doors. He realized he wasn't the only one left wondering what happened to his money.

Contact Denver7 has received messages from about 30 viewers who say they also signed contracts with Timeshare Termination Team and paid the company thousands of dollars. The combined amount of money lost from all the people who reached out is more than $130,000.

"In this case, unfortunately, it doesnt look very good. Its doubtful there will be any significant return. If youre talking about hundreds of thousands of dollars for claims and maybe $10,000 worth of assets, if youre lucky, people will see 10 cents on the dollar. In this case, probably even less than that," said Jamie Buechler, a bankruptcy attorney who is not affiliated with this case.

Dinges said he is trying to dispute the charge with his credit card company but he's not expecting much. He is also still left wondering if Timeshare Termination Team was ever a legitimate business or if it was a scam from the beginning.

"It makes me frustrated knowing that a company like this whether theyre legit or not can just declare bankruptcy and walk away and leave everybody in the lurch," Dinges said.

There will be a meeting for creditors on Oct. 28 at 10 a.m. They can call in by dialing 888-395-7928 and entering the passcode 4268596.

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Timeshare Termination Team files for Chapter 7 bankruptcy; former clients out thousands - The Denver Channel

A view of Capitol Hill in Washington August 1, 2011. REUTERS/Joshua Roberts

(Reuters) - A Democratic Congresswoman from Illinois has introduced a bill in the U.S. House of Representatives to end bonuses awarded both before and during bankruptcies for executives who make more than $250,000 per year.

Representative Cheri Bustos, who was joined by Tennessee Republican Representative Tim Burchett in sponsoring the bill, said in an interview with Reuters that the legislation introduced Tuesday is intended to prevent top officers from taking home additional compensation while lower-level employees are laid off as a result of the bankruptcy.

It's about fairness and it's about looking out for those workers and making sure that those at the very top don't get a bonus for basically working at a company that's filed (for)bankruptcy, she said.

Bustos originally introduced the bill, the No Bonuses in Bankruptcy Act, in 2019 and is revamping it now following a report from the Government Accountability Office that found in fiscal year 2020, $165 million in bonuses were paid to 223 executives across 42 companies shortly before they filed for bankruptcy. The report, which she commissioned, also found $207 million in incentive bonuses were authorized for 309 executives across 47 companies during their bankruptcies.

Hertz Global Holdings Inc made headlines last year by shelling out $16 million in bonuses days before it sought Chapter 11 protection. Other recent high-profile bankruptcies, including Purdue Pharmas, have secured court approval for executive incentive plans worth millions of dollars during their bankruptcies as well.

In Chapter 11 cases, executives are generally not permitted to receive retention bonuses but can be awarded incentive bonuses. To obtain court approval of incentive bonus plans, the companies must convince the judge overseeing the case that the executives will have to meet certain goals to enhance the companys restructuring process.

In addition to blocking executives making more than $250,000 per year from receiving bonuses during their companys bankruptcy, the bill would allow the U.S. Department of Justices bankruptcy watchdog, the U.S. Trustee, to claw back bonuses paid in the six months before the bankruptcy was filed if the bonus would not have been allowed during the case.

When initially introduced in 2019, the bill had 14 co-sponsors, including Burchett.

Earlier this year, Representative Greg Steube, a Republican from Florida, introduced a similar bill that would bar payment of executive bonuses before a bankruptcy. Separately, bills in the House and U.S. Senate aimed at curbing certain corporate bankruptcy practices on a broader level, including legal protections for a bankrupt companys officers and directors, have also been proposed.

Proponents of these types of executive bonuses have argued that they are necessary to keep management with institutional knowledge from leaving the company during a bankruptcy. They say the executives are essential to ensuring a successful restructuring. But Bustos said they shouldnt be rewarded if their companies have been placed in bankruptcy.

We ought to make sure that whether you have led that company into bankruptcy, whether you are now at the C-suite and that company has filed for bankruptcy, that you should not be allowed to be getting these bonuses, she said.

Read more:

Warren, Cornyn introduce bill to block judge-shopping in bankruptcy

With diminishing pushback, executive bonuses in bankruptcy veer toward 'entitlement'

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

Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at maria.chutchian@thomsonreuters.com.

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Bill introduced in Congress to end executive bonuses in bankruptcy - Reuters

Rochester, MN (KROC-AM News) - an A federal bankruptcy court has approved the bankruptcy reorganization plan agreed to by the Catholic Diocese of Winona- Rochester and a group representing survivors of sexual abuse.

A news release issued by the Diocese says the bankruptcy reorganization includes the creation of a trust funded with just over $22 million from the sale of specific church assets and $6.5 million from insurance settlements.

"I welcome today's announcement. I want to express my sincere apology to all those who have been affected by sexual abuse in our diocese," Bishop John M. Quinn said. "My prayers go out to all survivors of abuse and high pledged my continuing commitment to ensure that this terrible chapter in the history of the Diocese of Winona- Rochester never happens again."

The diocese filed for Chapter 11 bankruptcy reorganization in November 2018. The approved plan includes the implementation of "enhanced nonmonetary protocols" for the protection of children which were first enacted in 2002.

News Update:Chatfield Man Charged With Sexually Assaulting Young Girl

The Rochester Police Department is hoping to identify those responsible for the deaths of April Sorenson and Robert Volgmann.

Originally posted here:

Diocese of Winona-Rochester Bankruptcy Plan Approved - KROC-AM

The developer of The Outpost, a mixed-use project once touted as a model for the development of a pedestrian-oriented district along Poway Road, insists the project will move forward to a successful completion despite filing for Chapter 11 bankruptcy in September.

Poway Property LP, the owner-developer of the project, filed for Chapter 11 bankruptcy protection on Sept. 13, listing debts of $22.9 million owed to 11 creditors, and liabilities to a 12th creditor undetermined, according to the bankruptcy filing. The largest amount, $21 million, is owed to UC Poway Post Holder, LLC.

The developer listed assets of $50,000 or less, according to the bankruptcy filing.

While the numbers may look daunting, an attorney for the developer, David Speckman of San Diego, said the developer is determined the project will move forward to completion.

The project is going to be completed. The project is going to be back on track here shortly, Speckman said Friday.

Currently, all work at the site, a 1.58-acre parcel at Poway Road about a block west of Community Road, has ceased, Speckman said. The developer plans to bring a new general contractor on board once work resumes.

The project is being developed by Poway Property LP and its general partner, Canadian-based Capexco. Trent Claughton, the companys president and CEO, spoke at an August 2018 ground-breaking ceremony for The Outpost project, calling it a milestone that would help establish a walkable downtown district for the city.

To get the project back on track, the developer has proposed significant changes, Speckman said. Most notably, the developer wants to expand the residential portion of the mixed-use project.

The original plan approved by the city calls for 53 residential units, a food hall, a fitness center and two stories of underground parking. Under that plan, Speckman said residential would have accounted for 60 percent of the total 100,000 square feet, and commercial uses would have occupied 40 percent.

While Speckman could not provide a specific number of residential units called for in the new proposed plan, he said residential would now account for 82 percent of the square footage, with commercial making up 18 percent. It was not immediately clear whether the specific commercial uses would be changed or scaled back under the revised project. Total square footage would remain the same.

The developer hopes to bring the revised plan to the Poway City Council in November, Speckman said. We believe the city would welcome the new plan, he said.

The owner-developer is committed to seeing the project completed, Speckman said. Once the city signs off on the revised plan, he said, Then its anticipated theyll be able to arrange new financing to complete the project.

Poway Mayor Steve Vaus, who also spoke at the 2018 ground-breaking ceremony, predicting the project will be remembered for generations to come, referred a request for comment to Rene Carmichael, a city spokeswoman.

Carmichael said the bankruptcy filing is a concern, and that city officials are monitoring the site during the construction hiatus for any potential health and safety issues. However, the citys ability to intervene is limited because The Outpost is a private development.

Carmichael also said the proposed changes to the project are not far enough along in the citys review process to be brought forward to the City Council for consideration at a meeting in November.

According to Speckman, the underground parking and foundation of the project are 80 percent completed, while the overall project is about 25 percent completed.

The project, the first of its kind to be approved under an update to the Poway Road Specific Plan, has suffered some setbacks since construction began. In 2019, the developer announced completion would be delayed by one year due to complications in removing a larger-than-anticipated amount of groundwater during excavation.

In July of this year, a sub-contractor on the project, PERI Formwork Systems Inc. filed a lawsuit against Poway Property LP, Capexco and the general contractor on the project, K.D Stahl Construction Group Inc., alleging it had not been paid for concrete formwork and shoring materials it had provided for the project.

Under Chapter 11 bankruptcy, a company can reorganize and restructure its debts while continuing its business operations.

Speckman said such reorganization is sometimes used by a company to catch its breath, so it can safeguard its project and pay its creditors in an orderly fashion.

In this case, he said, the developer needed a pause to create a plan to pay its debts, gain city approval of the proposed changes, secure new financing and finish the project.

Were making good progress on that goal, he said.

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Developer of The Outpost in Poway files for bankruptcy - The San Diego Union-Tribune

Times Observer photo by Brian FerryThe Chief Cornplanter Council will not have to sell any of its properties to contribute to a victims trust for past abuse cases. The Chief Cornplanter Council payment into the trust is $260,931.32 to be funded by timber sales.

The Chief Cornplanter Council will not have to sell any properties.

In 2020, in response to hundreds of allegations of child sexual abuse nationwide, the Boy Scouts of America filed bankruptcy. Over the next year, the number of allegations grew into the tens of thousands and the entity created a victims compensation trust.

That trust more than $1 billion includes contributions from local councils.

The National BSA entered bankruptcy in 2019 with the goal of establishing a victims trust for past abuse cases, Chief Cornplanter Council Scout Executive and CEO Raymond Tennent said. Participation in the mediation to reach a settlement with claimants is critical for the future of the BSA and the Chief Cornplanter Council, BSA.

The Council entered the settlement to ensure the future of our local units as well, Tennent said.

The Council is chartered to the Boy Scouts of America and local units are chartered to the Council, not separate nonprofit corporations.

An ad hoc committee of volunteer lawyers from local councils, developed a formula to determine each councils payment into the abuse trust, according to Tennent. The Chief Cornplanter Council payment into the trust is $260,931.32. Although our Council has one of the smallest payments amounts required for the Abused Victims Trust, this is still a substantial amount for a Council our size.

The Boy Scouts owns two properties in Warren County, according to Warren County assessment data. Together, those properties represent 490 acres and a market value of about $160,000.

The Chief Cornplanter Council is listed as the owner of the council headquarters at 316 Fourth Ave., Warren, with a value of $36,204.

By liquidating some of the assets growing on those lands, the council will not have to liquidate any of those properties to meet the required amount.

We have been very fortunate that the Council had timber resources to build cash reserves and cover the Councils portion of the settlement, Council President Michael Barrett said. In fact, the select timber cut went so well we will have funds for camp improvements and the endowment to support camp operations as well, without significant damage to the camp property.

Recently, the Allegheny Highlands Council, including Chautauqua and Cattaraugus counties in New York, voted to sell one of its two camping properties.

The sale of the Elk Lick Scout Reserve in Smethport approved unanimously by the Allegheny Highlands Council would satisfy its roughly $900,000 required contribution.

We are not voting tonight on giving away a piece of history, we are voting on whether we want to keep Scouting alive in the Allegheny Highlands Council, Michael Kelley, AHC board president, told members in a newsletter. If things stay on course, the lawsuit may be coming to an end in the next 90 days it is not yet a done deal, but when it is, we will need to be prepared to put our part of the settlement into action. A key component of the plan is 100 percent participation by the 252 local councils; if any one of these councils decides not to participate, the deal is dead, and so is scouting.

Chief Cornplanter Council officials are ready to move forward.

The parties are expected to be in court at the end of the year to consider a $1.6 billion settlement.

The claimants will vote on the bankruptcy settlement on Dec. 14 and the council hopes to have the trust established and bankruptcy behind them by February so the focus can be 100 percent on fulfilling the councils mission of delivering a safe program to local youth for many years to come, Tennent said.

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Local BSA council won't have to sell properties in bankruptcy case - timesobserver.com

(The Conversation is an independent and nonprofit source of news, analysis and commentary from academic experts.)

(THE CONVERSATION) The Boy Scouts bankruptcy casecrossed an important milestone on Sept. 29, 2021, when Judge Laura Selber Silverstein approved the Boy Scouts statement that explains its plan to exit bankruptcy. That statement includes a proposal for compensating the tens of thousands of people who filed claims attesting that they were sexually abused while participating in the Boy Scouts programs. Survivors now get a chance to vote on the Boy Scouts exit plan. But for the Boy Scouts to exit bankruptcy and continue operating, the judge must sign off on it.

1. What does it mean that survivors will vote on the plan?

The Boy Scouts filed bankruptcy in February 2020 in the wake of lawsuits publicly exposing the decades-long sexual abuse of Scouts, with the intent to use bankruptcy to set up a fund to compensate survivors. The Boy Scouts plan to exit bankruptcy includes settlements with insurance companies, the Church of Jesus Christ of Latter-day Saints, which previously funded scouting activities, the Boy Scouts and its local councils. These settlement deals total almost US$1.9 billion.

The roughly 250 local councils will contribute $500 million, and the national umbrella organization, the Boy Scouts, will put in up to $320 million. Insurers and the Church of Jesus Christ of Latter-day Saints will collectively contribute a bit under $1.1 million. If the plan is approved, the settlement will prohibit further lawsuits against the Boy Scouts and its local councils.

For the judge to approve the Boy Scouts plan, a majority of the nearly 82,000 survivors who filed claims in the bankruptcy case and businesses owed money by the Boy Scouts that is, its creditors must vote in favor of it. The survivors will receive ballots and informational packets by mid-October. Survivors must return the ballots by Dec. 15, 2021. The votes will be tallied by Jan. 4, 2022. The judge has scheduled a hearing on Jan. 24, 2022, to consider the results of the voting and whether to approve the Boy Scouts bankruptcy exit plan.

Abuse claimants face a tough decision. Throughout the bankruptcy case, survivors and their attorneys have called out the Boy Scouts for neglecting to protect children for decades and instead shielding abusers. The committee that represents abuse survivors as a whole in the bankruptcy case has counseled survivors to reject the plan and has stated that the plan is grossly unfair. In contrast, attorneys separately representing tens of thousands of abuse claimants have encouraged survivors to vote in favor of the plan because they believe it is the best possible outcome.

2. How much money may abuse survivors receive?

In addition to voting in favor of or against the plan, the ballot that survivors will receive requires them to choose between two options for payment. They can get an expedited distribution payment of $3,500, with almost no questions asked. Or they can choose to go through an evaluation process of their abuse claim. If they choose the process, survivors will receive amounts based on the severity of the abuse they suffered and other criteria. Based on the criteria, a survivor could receive as little as $3,500 or as much as $2.7 million.

3. How could approval of the plan help the Boy Scouts?

The Boy Scouts membership has plunged in recent years, decreasing by 43% from about 2 million in 2019 to 1.1 million in 2020. The decline is partly due to the publics growing awareness of the alleged widespread molestation of Scouts and the Boy Scouts decades-long cover-up of the abuse.

There likely are other causes, such as the COVID-19 pandemic, the Boy Scouts battles over the inclusion of LGBTQ individuals and the Church of Jesus Christ of Latter-day Saints decision in 2019 to pull its 400,000 members from the Boy Scouts to start its own youth program.

Every time there is news from the case, the Boy Scouts history of turning a blind eye to the abuse is put on display again. As the case continues, churches and other organizations that historically have hosted Boy Scout troops and events may think twice about continuing their relationships, especially if they worry about their own liability for the abuse suits.

Approval of the Boy Scouts plan and settlement will finally close this chapter of the Boy Scouts history. This may allow the Boy Scouts to focus on rebuilding its programs, maintaining relationships with churches and other organizations, and forging new relationships.

4. What happens if the plan is not confirmed?

A possible outcome of the hearing scheduled in January 2022 is that the judge does not approve the plan. This might happen for several reasons. Not enough abuse survivors or other creditors may vote in favor of the plan. There also are a few elements of the settlement that the judge still must consider before signing off.

If the judge does not approve the plan, the Boy Scouts bankruptcy case will continue. The Boy Scouts will return to negotiations with insurers, abuse survivors and others to try to craft another settlement agreement and bankruptcy exit plan. This outcome could make the bankruptcy case drag on even longer.

5. Whats the significance of the voting process for survivors?

Each survivors decision about how to vote is their own. Although survivors can seek guidance from their attorneys, the decision ultimately must be made by each of them. In bankruptcy, voting on the plan is the moment when everyone has a voice.

Abuse survivors finally have the chance to have their voice heard. They have the power to tell the Boy Scouts, through their vote, how they feel about how the Boy Scouts has responded to a deluge of abuse claims and the price tag that has been attached to their pain.

[Over 110,000 readers rely on The Conversations newsletter to understand the world. Sign up today.]

This article is republished from The Conversation under a Creative Commons license. Read the original article here: https://theconversation.com/sexual-abuse-survivors-are-voting-on-the-boy-scouts-bankruptcy-settlement-5-questions-answered-168337.

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Sexual abuse survivors are voting on the Boy Scouts bankruptcy settlement: 5 questions answered - The Edwardsville Intelligencer

Chuck E. Cheese, Hertz and J.C. Penney are three very different companies but share one thing in common: oddly timed executive bonuses before their corporate bankruptcy filings.

Each company gave its top executives a pay bonus last year just before declaring Chapter 11 bankruptcy. So did Neiman Marcus, as well as oil companiesWhiting Petroleum and Chesapeake Energy. All told, 42 companies awarded millions of dollars in so-called "retention" bonuses in the days leading up to their bankruptcies, the Government Accountability Office, or GAO, found in a new report.

"These companies paid bonuses totaling $165 million anywhere from five months to as little as two days before the company filed for bankruptcy," Michael Clements, the GAO's financial markets director, said in a GAO podcast discussing the report.

The awarding of retention bonuses by dozens of companies ahead of Chapter 11 filings shows that the U.S. bankruptcy code needs fixing, experts told CBS MoneyWatch. The change perhaps involves amending a bankruptcy code rule that Congress passed about 15 years ago, they said.

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which greatly limited debtor companies' ability to give out executive and worker retention bonuses without a bankruptcy judge's blessing. The bankruptcyrules, however, do not regulate what a company can do before it files for bankruptcy, said Gregory Germain, a bankruptcy expert and law professor at Syracuse University.

Out of 7,300 companies that filed for bankruptcy last year, none asked for a judge's approval for retention bonuses, the GAO found. Instead, many gave the bonuses beforehand.

Congress can fix this by passing a new rule, Germain said.

"If they want to stop the process of awarding management for driving the company into bankruptcy, they really need to make it before and after bankruptcy," he said. "Otherwise, all you're doing is creating an incentive to pay the compensation before bankruptcy."

The GAO interviewed bankruptcy attorneys as part of its 34-page report, which was released last week. In it, attorneys said the bankruptcy abuse act is "less-than-effective" because companies have found a way to work around it. Giving retention bonuses overall is problematic, they said, because it effectively reduces the amount of money a company could be paying toward its debt.

Scrutiny behind retention bonuses comes as U.S. companies are filing for bankruptcy at a historically high clip. In 2020, amid the pandemic, 630 companies declared bankruptcy the highest count since 2010, according toS&P Global. Companies are still filing for bankruptcy this year, but the data halfway through 2021 suggests the levels won't be as high as last year.

Plummeting sales in 2020, caused by the coronavirus pandemic, led some of the nation's largest retailers to file for bankruptcy. But as stores closed and employees were furloughed or laid off, some CEOs received hefty bonuses.

Hertz CEO Paul Stone received $700,000, Chuck E. Cheese CEO David McKillips got $1.3 million andJ.C. Penney CEO Jill Soltau received $4.5 million just to name a few.

Companies grant these retention bonuses because they want the best possible executive available to manage the bankruptcy turnaround, said Jared Ellias, a corporate bankruptcy law expert and professor at the University of California at Hastings. In some instances, companies are fearful of losing top managers because "it could take six months to a year to hire someone new," Ellias said.

In regulatory filings, companies often argue that retention bonuses entice executives and other key employees to stay and repair what's ailing the firm.

"That's an excuse," Germain said. "They'll say [the CEO] knows where the problems are and how to fix them, but whether that's true or not, nobody knows. In most cases, [the bonus] is not necessary at all. To some degree, the executives are taking advantage of a company with already serious problems."

Chuck E. Cheese defended the bonuses it gave McKillips and 29 other employees, saying in a statement to CBS MoneyWatch that the company "took action to preserve business continuity."

"These actions were put in place to ensure we have the management expertise and dedication to best position the company, in this unprecedented environment, to meet the needs of our customers, employees and business partners," the company said.

Hertz did not respond to requests for comment.

J.C. Penney declined to comment but the companysaidin a regulatory filing last year that the bonus pay was designed to "retain and continue to motivate its named executive officers and other employees through the volatile and uncertain environment affecting the retail industry."

Khristopher J. Brooks is a reporter and video editor for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports. Brooks has covered business and economic development for the Rochester Democrat and Chronicle and the Bristol Herald Courier. He also covered higher education for the Omaha World-Herald, the Florida Times-Union and The Ledger in Lakeland, Florida.

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Bankrupt companies gave $165 million in bonuses to top execs before going belly up last year - CBS News

D.A.B. Constructors filed for bankruptcy early last month. Nature Coast EMS filed for bankruptcy Oct. 2, the same day the county took over ambulance services.

County Attorney Denise Dymond Lyn

In the wake of these two high-profile bankruptcies, County Attorney Denise Dymond Lyn in a memo attached to the Oct. 12 commission agenda - is recommending the board retain Largo bankruptcy consultant Jake Blanchard as an assistant.

Get more from the Citrus County Chronicle

Blanchard, in a memo to Lyn, said his hourly billing rate is $300 for government work. His fees are not expected to exceed $8,000, according to Lyn.

Its been quite a month for Citrus County regarding these two high-profile companies.

D.A.B. Constructors announced last month it was filing for Chapter 7 bankruptcy and theunexpected closure left a huge dent in county road projects.

D.A.B. was already behind schedule to finish the still-incomplete widening segments of U.S. 19 in Homosassa and Crystal River. The sureties are scrambling to find a replacement company.

D.A.B. also had a $3.4 million contract to resurface Citrus County neighborhood roads.

Then came the countys sudden decision last month to end its contract with Nature Coast EMS and take over the service after the private, nonprofit kept returning for additional financial help to keep it operating and give staff raises.

The commission meeting begins at 1 p.m. Tuesday, Oct. 12, at the courthouse in Inverness.

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County may seek help from bankruptcy attorney to assist with D.A.B and EMS Nature Coast - Citrus County Chronicle

On Sunday, October 3rd, shortly before 60 Minutes aired an interview in which Frances Haugen outed herself as the Facebook whistle-blower, Mark Zuckerberg, Facebooks C.E.O., posted a video that began with his wife, Priscilla Chan, sitting on a sailboat. She grins for a second, as if posing for a photo; then she turns, her grin starting to fade; then, apparently realizing that she is being videotaped, she does her best to sustain a smile. In the final edit, the sound of whipping wind was replaced by Duke Ellington and John Coltrane playing the opening bars of In a Sentimental Mood. Sailing with Priscilla and friends, Zuckerbergs caption read. Shot on . The clip, in other words, was not just a life update but a product demo: Zuckerberg had recorded it using a pair of Stories, new first-generation smart glasses co-designed by Facebook and Ray-Banideal for those relatable everyday moments when you want to keep streaming but you need to keep both hands on your jib sheets.

On 60 Minutes, Haugen summarized some of the extensive evidence shed collected while she was a Facebook employeethousands of pages of internal documents, some of which she leaked to the Wall Street Journal, the Securities and Exchange Commission, and members of Congress, in which Facebooks researchers and other employees describe, often with chilling precision, what their products are doing to humanity. As reported by the Wall Street Journal, the documents reveal (or, really, confirm) what many social-media skeptics have long argued: that Facebook makes millions of its users more angry, more confused, and more psychologically frail; that comments discouraging vaccination against COVID-19 are rampant on the platform, and that efforts to flag them for review are bad in English, and basically non-existent elsewhere; that a non-trivial proportion of suicidal teen-agers traced the desire to kill themselves to Instagram; that its against Facebooks rules to post revenge porn, but that when youre a star they let you do itthat, in other words, Facebook is just as toxic as we thought, and that the companys top executives know this but seem to treat it as little more than a P.R. problem. (In a post rebutting the Wall Street Journal series, a Facebook official wrote, These stories have contained deliberate mischaracterizations of what we are trying to do, and conferred egregiously false motives to Facebooks leadership and employees.) On 60 Minutes, Haugen concluded that it was time for Facebook to declare moral bankruptcy, which she defined as an opportunity for Mark, for Facebook, to come in and say, We completely messed up.

Of course, Zuckerberg has been saying more or less those exact words since before Facebook was Facebook. What Haugen really wanted, presumably, was for him to mean it this time, and to do something about it. In An Ugly Truth, a formidable feat of muckraking published in July, the co-authors Sheera Frenkel and Cecilia Kang provide about five reasons per page to regard Facebook as the sociocultural equivalent of a fossil-fuel company. Before you even open the book, though, there are the blurbs. Zuckerberg, September, 2017: I ask for forgiveness and I will work to do better. Zuckerberg, April, 2018: It was my mistake and Im sorry. Zuckerberg, May, 2020: We need to do a better job. The books designers were limited only by the dimensions of the cover, not by a paucity of similar quotes.

Last month, in the Times, Frenkel and her colleague Ryan Mac published an article titled No More Apologies: Inside Facebooks Push to Defend Its Image. In the article, Facebooks current communications and policy executives (that is, the ones who have chosen to stay at the company, and whom Zuckerberg has chosen to promote) come across as thin-skinned, provincial, defensive nearly to the point of self-delusion. They seem convinced that Facebook is the victim of an unfair and disproportionate amount of bad press, and that attempts to placate the public have only backfired. Instead, they settle on what is called, in a tellingly oxymoronic phrase, a more aggressive defense. (The notion that the criticism is mostly warrantedthat the salient issue is not an overzealous regulatory state, an axe-grinding mainstream media, or an inexplicably irrational user base but that the central problem with Facebook is Facebookdoes not seem to occur to them.) Frenkel and Mac report that the communications team discussed ways for executives to be less conciliatory and came up with a strategy for distancing Mr. Zuckerberg from scandals, partly by focusing his Facebook posts and media appearances on new productsa way for him to spend less time tacking into headwinds and more time posting about surveillance sunglasses. (A Facebook spokesperson told the Times that the company had not changed its approach.)

On Monday, the day after Haugens 60 Minutes interview and the day before she spoke at a Senate hearing, some of Facebooks routers failed, causing Facebook, Instagram, and WhatsApp to crash for most of the afternoon. This was a big enough deal that Zuckerberg briefly suspended his no-apology rule. Sorry for the disruption today, he posted. I know how much you rely on our services to stay connected with the people you care about. Conspiracy theories abounded, but the outage seems to have been a coincidencethe kind of thing that can happen, pretty much anytime, when billions of peoples online lives depend on the infrastructure of a single company. Monopoly systems are fragile and dangerous and besides allowing for abusive, extractive, behavior, are just a stupid way to design anything, Zephyr Teachout, an activist and antitrust scholar, tweeted. Break em up. During the roughly six hours when its apps were unusable, Facebooks stock price plummeted, causing Zuckerberg to lose, on paper, nearly seven billion dollars. By Monday night, though, the stock price had started to rebound, and he was back to posting about non sequitursin this case, one of the nonprofits funded by his philanthropy.

The next day, Zuckerberg wrote an aggressively defensive memo to his employees, then shared it on his Facebook page. The no-apology rule was back in effect. Im sure many of you have found the recent coverage hard to read because it just doesnt reflect the company we know, he wrote. The argument that we deliberately push content that makes people angry for profit is deeply illogical.... The moral, business and product incentives all point in the opposite direction. This has been his line for years, but his tone has recently grown more defiant, even desperate. In one sense, this was discouragingjust about the opposite of the road-to-Damascus moment that Haugen was envisioning on 60 Minutes. In another sense, it was bracing, like the moment in a ferocious argument when your antagonist finally drops his layers of pretense and admits how he really feels. As usual, Zuckerberg padded his rationale with some carefully selected statistics, but his heart didnt seem to be in it. When I reflect on our work, I think about the real impact we have on the worldthe people who can now stay in touch with their loved ones, create opportunities to support themselves, and find community, he concluded. Im proud of everything we do to keep building the best social products in the world. That has always been his bottom line; he hardly seems to care, these days, how many rhetorical contortions it takes him to get there. (We have absolutely no commercial incentive, no moral incentive, no company-wide incentive to do anything other than to try to give the maximum number of people as much of a positive experience as possible on Facebook, and that is what we do day in and day out, Andy Stone, a Facebook spokesperson, told me.)

In her review of An Ugly Truth, my colleague Jill Lepore compared Facebook to a church. In any kind of churchnot to mention a multilevel-marketing scheme, or a doomsday cultthere are true believers. If you start to get the creeping feeling that your churchs core ideology is indefensible, you have two options. You can do whatever it takes to defend the indefensible, or you can leave. For most true believers, though, the latter optionchoosing apostasy, which is a kind of self-exileis not really an option at all. If this is the dilemma that binds a follower, how much more strongly does it bind the churchs founding pastor, or its prophet?

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The Moral Bankruptcy of Facebook - The New Yorker