Categorized | General Interest

Ho, Hum, Just Another Example of Detroit Workers v. Attempted CEO Robbery

Today’s lesson is another chapter in why people like Detroit workers — regular people — don’t get treated like CEOs. Meaning, when someone else screws up, workers get the shaft. But, when the CEO screws up, no problem — he gets to keep a truckload of money. Though one trustee, thankfully, is not buying it.

You may remember that American Airlines filed for bankruptcy in late 2011. The excuse was, as usual, to cut “labor costs”…except that didn’t mean the CEO. And the bankruptcy trustee is not happy (behind the Wall St. Journal’s paywall):

Justice Department officials monitoring the AMR Corp.’s bankruptcy case again objected to a proposed $20 million severance package for Tom Horton, AMR’s current chief executive, according to a court filing made late Friday.

Although AMR’s creditors approved by a wide margin the bankruptcy-exit plan for the American Airlines parent, the Office of the U.S. Trustee, a branch of the Justice Department, asked the court to deny the provisions of the bankruptcy-exit plan that provide for Mr. Horton’s payment.

U.S. Trustee Tracy Hope Davis also asked the court to deny provisions of the exit plan that permit expenses to be paid to indenture trustees and members of AMR’s creditors committee without full compliance with certain bankruptcy rules.

Of course, the company thinks the deal is just fine because blah blah blah…but it’s just another sign of how robbery takes places, with the blessing of laws that are just screwed up.

Workers always gets hammered in a bankruptcy — right now, through no fault of their own, Detroit workers are facing loss of pensions — deferred wages, their money.

In the American Airlines case, workers gave up a lot — but the CEO wants a nice $20 million to walk away.

As I wrote earlier this week, the so-called “free market” takes its pound of flesh from workers, but never the CEO.

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