Monday, December 10, 2012

Hostess Payed Out Bonuses While Shorting Employee Pension Payments

Today the Wall Street Journal reports "Hostess Maneuver Deprived Pension" 12/10/2012 p. C1 by J. Jargon, R. Feintzeig and M. Spector

[Excerpted] Hostess Brands Inc said it used wages that were supposed to help fund employee pensions for the company's operations as it sank toward bankruptcy.... Gregory Rayburn, Hostess' chief executive officer, said in an interview it is 'terrible' that employee wages earmarked for the pension were steered elsewhere..."

Majia here: However, in November CNN reported that a bankrupcy judge had approved BONUSES for executives:

Judge OKs bonuses for execs in Hostess liquidation @CNNMoney November 29, 2012: 6:10 PM ET

[Excerpted] Union representatives had opposed the plan, which offers $1.75 million in bonuses ranging from $7,400 to $130,500 for 19 executives, provided they meet certain benchmarks in managing the liquidation. But Judge Robert Drain said the plan was appropriate, citing testimony that it had been independently vetted and was below market value for firms in similar circumstances. 

Majia here: One has to wonder how it is that a bankruptcy judge would consider it appropriate to fund executive bonuses after the company re-directed funds allocated for pension funds to operations? Even the CEO described this sleight of hand as "terrible."

This is really outrageous and illustrates once again the pillaging that is occurring as those in societal "leadership" positions wantonly grab everything they can, corrupt the "justice system," while destroying what is left.

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