Masters of Phoney Profit
Gotta say that I’m inclined to suggest a rule of thumb dictating that executive bonuses are simply not permitted while their companies are in bankruptcy, mainly for the reason expressed by U.S. Bankruptcy Court Judge Arthur Votolato with reference to such a request from Twin River:
“I’m concerned with how the management team gets credit for growing this monster they can’t pay for,” Votolato said.
To which one of the company’s lawyers responded as follows:
Hessler suggested the judge had to separate the slot parlor’s burdensome loan package from the money it makes on gambling.
Why? At the very least, our bankruptcy system shouldn’t be so structured as to create incentive to borrow and then turn to the courts to wipe out debt while the architects of the scheme profit.