One of my clients told me a story that made my blood boil. He’s working at a plant that slated to close at the end of the summer. I asked if he’s going to get a severance. He said probably not. The company, which has always been profitable, is declaring bankruptcy to avoid paying severance. My client has only been with the company three years, so he doesn’t face the problem many of his co-workers do: bankruptcy would enable the company to bail out on its pension payments.
This isn’t the first time I’ve heard this story lately. One of my clients works for a large airline. Half of his pension was lost in a restructuring. Workers across the company are facing this creative accounting/legal trick.
If a company is failing, it should have the option of bankruptcy. If a company simply wants to save money, it should not be able to declare bankruptcy. Citizens have restrictions placed on declaring bankruptcy. There is pain involved. For big business? It’s all good.