horton = evil bastard

[dollacrackho]

http://dealbook.nytimes.com/2012/07...s-dance-around-a-merger/?partner=yahoofinance

This was so obvious from the beginning and its right from every CEOs playbook but Horton is such a scumbag. He would watch his whole company burn just so he can get paid off. American employees should have a big party for this piece of excrement you wipe off your shoe.

 

[fam62c]

I never understood why creditors were willing to take less than 100% in a bankruptcy yet give the management team (often the same people who were running the company when it went bankrupt) equity that should be theirs. I can understand it in the case of labor because labor needs to be persuaded to give up things that translate into huge cost reductions but what does the management team give up except stock options that THEY destroyed the value of? The management team gets to keep their employment agreements and usually gets retention bonuses during bankruptcy (and their retirement generally gets protected as well) as well as a sweetheart deal on exit. What a deal, you put your company into bankruptcy and come out smelling like a rose while the rank and file take all the hits. It's no wonder bankruptcy is such a popular business strategy in this industry, it comes with a "bankruptcy bonus." There's a perverse incentive if there ever was one.

I don't get why all the normal employees are expected to do a good job to earn their paycheck and remain employed but upper management needs special incentives and bonuses (in addition to their salary, benefits and perks) to do theirs. On top of this they have employment agreements so even if they do a crappy job and have to be let go they get paid large sums of money to leave. These guys get bonuses to get hired, fired, if the company does well or poorly and if the stock goes up or down and the unions get accused of having an entitlement mentality.

 

[waveflyer]

"Mr. Horton and his management team stand to receive somewhere between $300 million and $600 million if he can make it through bankruptcy court without merging first with a rival like US Airways.

In an odd twist of the bankruptcy process, airline management teams have typically managed to extract 5 percent to 10 percent of the company’s shares for themselves upon exiting Chapter 11, with the C.E.O. often getting 1 percent.

This happens, oddly enough, despite some of the same management wiping out shareholders (including themselves) by filing for Chapter 11 in the first place. AMR is expected to be valued at as much as $6 billion if it exits bankruptcy independently, analysts estimate.

Over the last several decades in the airline business, this is where C.E.O.’s have gotten rich.

Take a look at United’s bankruptcy back in 2005: Glenn Tilton, who was then the airline’s chief executive sought 15 percent of the company’s equity for management from creditors; after pushback from creditors, management lowered its request to 11 percent. After some back and forth, management was awarded 8 percent of the company. Mr. Tilton received a pay package worth nearly $40 million in new shares and other compensation in the company’s first year after emerging from bankruptcy."

This ^^^^ is what is wrong with American "capitalism"

 

[redflyer65]

Let's see, run a company into bankruptcy then reap millions off the company for doing so? Yea, that's pretty f'ed up. These guys should get exactly what the orginal shareholders did. NOTHING.

 

[chqflyer]

Sadly, this is simply the norm in today's corporate America. If I recall correctly, the exiting failure of a CEO at Home Depot was given somewhere close to $200 million as an exit bonus for practically destroying the company.
Yup. Here it is.
http://money.cnn.com/2007/01/03/news/companies/home_depot/index.htm

 

[JetMonkey]

David "the Weasel" Siegal walked away from the old USAir with $5 Mil after taking them into bankruptcy TWICE. Two weeks later the CFO left with $3 Mil. $8 Million in a couple weeks for two scumbags..

 

[Data]

This ^^^^ is what is wrong with American "capitalism"

No, this is what's wrong with the bankruptcy laws and the subversion of business by lawyers and politicians.

 

[waveflyer]

Oh that's right data- I'm sure powerful business people had nothing to do with hiring the lobbyists and lawyers, and funding campaigns to get those laws passed.
I know it sounds very 99%, but recognize the problem at its core.

 

[Dan Roman]

Well played Wave!
I think pretty much all of us will be in agreement that the transfer of wealth from the majority to a handful is a real problem in this country. Along those lines, those few who have reaped billions somehow have brainwashed some that they are "job creators" That's a pet peeve of mine. They are not "job creators". More often than not they destroy jobs to make the huge capital gains they reap. They ship jobs overseas, they use bankruptcies to their advantage, they shrink companies and steal assets, etc etc
They simply are NOT job creators, it's the middle class that is the engine that drives the economy, the few like Horton are always looking for ways to take advantage of people for personal gain. They do not care what happens to the employees.
All that said, no I'm not some bitter far left nutcase that hates all capitalism. Capitalism is great, your Herb Kellaher is a great example of a job creator. There are many others, I'm working for one now. Sadly though, there are far too many people taking advantage of the middle class because they can.

 

[dollacrackho]

This billionaire CEO buddy club is so bizarre. Sit atop a company, run it into the ground and then have zero culpability to your employees and investors. Oh and then here's 500 million bucks for a job well done!