OK

This is only a Preview!

You must Publish this diary to make this visible to the public,
or click 'Edit Diary' to make further changes first.

Posting a Diary Entry

Daily Kos welcomes blog articles from readers, known as diaries. The Intro section to a diary should be about three paragraphs long, and is required. The body section is optional, as is the poll, which can have 1 to 15 choices. Descriptive tags are also required to help others find your diary by subject; please don't use "cute" tags.

When you're ready, scroll down below the tags and click Save & Preview. You can edit your diary after it's published by clicking Edit Diary. Polls cannot be edited once they are published.

If this is your first time creating a Diary since the Ajax upgrade, before you enter any text below, please press Ctrl-F5 and then hold down the Shift Key and press your browser's Reload button to refresh its cache with the new script files.

ATTENTION: READ THE RULES.

  1. One diary daily maximum.
  2. Substantive diaries only. If you don't have at least three solid, original paragraphs, you should probably post a comment in an Open Thread.
  3. No repetitive diaries. Take a moment to ensure your topic hasn't been blogged (you can search for Stories and Diaries that already cover this topic), though fresh original analysis is always welcome.
  4. Use the "Body" textbox if your diary entry is longer than three paragraphs.
  5. Any images in your posts must be hosted by an approved image hosting service (one of: imageshack.us, photobucket.com, flickr.com, smugmug.com, allyoucanupload.com, picturetrail.com, mac.com, webshots.com, editgrid.com).
  6. Copying and pasting entire copyrighted works is prohibited. If you do quote something, keep it brief, always provide a link to the original source, and use the <blockquote> tags to clearly identify the quoted material. Violating this rule is grounds for immediate banning.
  7. Be civil. Do not "call out" other users by name in diary titles. Do not use profanity in diary titles. Don't write diaries whose main purpose is to deliberately inflame.
For the complete list of DailyKos diary guidelines, please click here.

Please begin with an informative title:

Hostess cupcake split to reveal creamy center.
For executives, big bonuses are bankruptcy's creamy filling.
Last week, a federal judge gave Hostess the go-ahead to hand out $1.8 million in bonuses to executives involved in liquidating the company. That seems gross enough, until you realize that it's common practice for companies in or about to enter bankruptcy to hand out big bonuses:
More than 1,600 insiders—executives and others controlling a company—received bonuses, salaries, fees and other compensation totaling more than $1.3 billion in the months before their companies filed for Chapter 11, according to a Wall Street Journal analysis of more than 80 bankruptcy cases over the past five years.
Because there are rules limiting bonuses for executives during bankruptcy, companies often hand out the bonuses shortly before filing:
Blockbuster Inc. paid collective bonuses totaling roughly $775,000 to a dozen top executives and managers one week before its September 2010 bankruptcy filing, according to a banker and a consultant familiar with the plan. The timing was an effort to avoid scrutiny under the bankruptcy law limiting retention plans, they said.
But don't worry—Blockbuster's general counsel, who received $100,000, described the bonuses as "relatively small."

Other companies ties bonuses to performance measures, as Hostess did to gain the judge's approval. But that's performance during the bankruptcy—you couldn't make the company a success, but nice bankruptcy, so here's a relatively small giant pile of cash. One rationale for such bonuses is to keep executives around through the bankruptcy, when it would be difficult to hire replacements if they left. Being offered a bonus to stick around because you're likely to have so many great job offers despite having had a leading role in a failing company is quite a different experience from that of rank-and-file workers who face unemployment when their companies go bankrupt, isn't it?

Intro

You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

Extended (Optional)

Originally posted to Daily Kos Labor on Tue Dec 04, 2012 at 11:35 AM PST.

Also republished by In Support of Labor and Unions and Daily Kos.

EMAIL TO A FRIEND X
Your Email has been sent.