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View Diary: Hostess Workers are Winning... (149 comments)

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  •  There are a few ways to do this (9+ / 0-)

    to safeguard union members. If a Company borrows from a workers pension fund, the pension fund should become a secured creditor of the company. That usually means signing and registering UCC financing statements that show what assets of the company that the creditor (Union) has . It notify all other potential creditors who is first in the pecking order.  They could do this now through negotiations. They should come before the Bond Holders too.

    In the Bankruptcy reform act of 2005, they put Derivative holders and Bond holders way above all secured creditors. I think if the Dems ever intend to do anything for it's base is to amend the bankruptcy laws by making pension funds not only first lien secured  creditors of the company but create a new law that is similar to the law governing Social Security.

    If a company owner(s) don't pay payroll taxes it's a Felony with a mandatory sentence of  five years. That should also be introduced for Pension funds. Stealing is stealing. There shouldn't  just be civil remedies but criminal deterrence penalties. That would stop a lot of these vulture capitalists cold.

    Keep in mind, many of them don't inject money directly in the company. They buy the bonds on the secondary market or though private transactions for pennies on the dollars. I would be stunned if Silver lake had more than 10 cents on the dollar in the amount of debt they claim is owed to them. That's why this will end up in liquidation.  You can't file Bankruptcy if it's a going concern. But Silver Lake Partners has no interest in hostess or a multi year turn-around. They have accessed the situation and have found that a liquidation with a sales of the assets will get them the fast return they are looking for instead of negotiating a return of the company to fiscal health. Hence "The unions won't negotiate".

     The only interest they have is the return on their bonds for the wealth investors in their fund which works much like a hedge fund with 20% + 2%, 20% of the profits and 2% of the fund's size for management fees.

    This is Vulture capital at work. It works differently than PE capital but they work together like hand in glove. PE Capital destroys the company, Vulture capital buys the discounted bonds and makes out like bandits in Bankruptcy court or in a quick sale. There is another 1.4 Billion in debt to due to unsecured creditors who won't see a dime.

    It's time Unions started to get some business savvy by understanding the goals of the ass-holes they  are negotiating with . Start playing hard ball so the Vulture capitalists fear the loss of their bonds.  That will push the negotiations onto a more even playing field.

    •  Well said, and long overdue................... (1+ / 0-)
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      Dburn

      Bankruptcy reform was a huge give away to the corporations, while making life far more miserable for the average joe.

      They had to securitize all that unsecured debt so they could sell it, the whole thing makes me sick.  

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