> Providing employees with de novo severance after you know it's going under guarantees creditor lawsuits.
Citation needed. Providing executive suite with bonuses and parachutes does. Indeed, even law firms talk about this:
> Severance payments to “insiders” (generally defined under the Bankruptcy Code as officers, directors, persons in control of the business, and relatives of such individual(s)) could be subject to lawsuits to avoid or clawback the severance payments.
Fraudulent conveyance, there. No mention is made of creditors issuing lawsuits against rank and file employees.
Indeed, even for severance payments that were never in employment contracts, courts place them at/near the front of the line in bankruptcy proceedings, witness Toys R Us.
But I'd be very curious to see any cases where creditors have been able to block severance payments that are not to the C suite.
