From: mike wilson
On 27/02/2011 17:28, frank theriault wrote:
> On Sun, Feb 27, 2011 at 11:20 AM, Bob Sullivan<[email protected]> wrote:
>> And Frank,
>> I want to tell you something that will make you happy.
>> We visited rich friends in a gated community in Naples Florida.
>> 4 people on their block were early retirees from General Motors.
>> Their pension benefits were capped at $72K.
>> (I know that's a lot, but it's a lot less than they were getting.)
>> And the highest ranked among them has already sold and move back to Michigan.
>> They were all drawing money from 'defered compensation plans',
>> where GM held back some salary to pay them later at a lower tax rate.
>> Guess what. In bankruptcy, all those funds go to the creditors.
>> It puts a 6 figure crimp in their lifestyles...
>> Regards, Bob S.
>
> That doesn't make me particularly happy, Bob. First of all, I'm sure
> these people worked hard for their money, often working long hours,
> weekends, with many business trips and lots of pressure. I may not
> agree that the work they did was for the betterment of all, but they
> had every right to rely on agreements made with their company and to
> pattern their life accordingly.
>
> The fact that due to GM making bad decisions they lost their pensions
> or a portion thereof only means that creditors got that money - and
> I'm sure that banks reaped most of that benefit. I'd rather see the
> money in the hands of an individual than a huge faceless corporation.
>
> I don't think there's anything happy about your story.
Agreed. If they had been in a union, it would hopefully not have
allowed those funds to be kept in a place available to creditors. Did
GM actually go bankrupt?
They did.
And know that the bankruptcy laws were re-written during the Bush
Administration to permit corporations to use bankruptcy as a means of
abrogating union contracts and pension benefits. Prior to the laws being
re-written GM would have not been able to escape those obligations
through bankruptcy.
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