Saturday, January 26, 2008
Justice in Bankruptcy Court
That is not something you get to see every day. But one case seems to have brought out one judges better side.
MORE than two years ago, the Delphi Corporation, an automotive parts giant, filed for bankruptcy protection. Even as it asked workers, creditors and owners to accept big losses, Delphi requested a lush executive pay package that included $87 million in cash bonuses to be paid to top managers upon the company’s exit from bankruptcy. It was a wonderful example of unshared sacrifice that has become deplorably common in corporate America.What you have to remember is that the guys bringing Delphi out of bankruptcy are the same ones that drove it into bankruptcy in the first place. All told, the $16.5 million is probably still too much, but it is an honorable, and much called for reduction.
Last week, Robert D. Drain, a federal bankruptcy judge in the Southern District of New York overseeing the Delphi bankruptcy, held a hearing to approve the company’s reorganization plan. Delphi hopes to exit bankruptcy this spring.
During the hearing, Judge Drain, who spent roughly an hour on the terms of the payouts and the compensation consultant who devised them, said he would approve Delphi’s bankruptcy exit plan only if the $87 million in incentive pay slated for management was reduced sharply, to $16.5 million.
Subscribe to Posts [Atom]
Post a Comment