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0 pointspaulddraper2y ago0 comments

> paid comp to the execs for a full year

IDK if Shone did things the most intelligent way, but the general story is not uncommon.

Shareholders/creditors have a mess if the CEO and CFO walk out the door for their new job; it is financially beneficial for them to liquidate assets and shut the door.

Shareholders/creditors don't have a mess when the engineer and a product manager walk out the door to their new job.

That's how the logic works.

0 comments

Retric2y ago

This stuff doesn’t require the CEO or CFO either. Receivership doesn’t even require the active participation of the board, so yes there’s some benefit of keeping existing executives around but that’s often offset by the costs of doing so.

paulddraperOP2y ago

> Receivership doesn’t even require

Cooperation of board/executives is not required but it is immensely helpful.

"The easy way" vs "the hard way."

pseg1342y ago

How would it possible help in this situation? The game is over and everyone knows exactly where all the money is. It will just be distributed back to the creditors and then remaining to the shareholders. Who needs the CFO for that? Basically anyone could run that process.

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shiroiuma2y ago

Maybe they need something in bankruptcy law that requires the executives to stick around, at low pay, to do their jobs and unwind the company. After all, they're the ones who made it fail. Why should they be allowed to walk away?

If a regular individual declares bankruptcy and then doesn't bother doing any of the required paperwork and legal stuff, saying the court needs to pay them top dollar for their time, things will not go well for them.

broken-kebab2y ago

You mixed up a lot of things here. On practical side: execs, and accounting already legally must do paperwork, however shareholders want them to go well beyond that. And you can't force people to do job properly just by legally obliging them, otherwise Soviet Union would not fail.

On moral side: business in general (and startups especially) requires navigation between things many of which are unpredictable, and plenty are beyond your control. Also I've seen startups failing because of software bugs, and technical limitations. In this particular case, do you know about any obvious wrongdoing? If not you probably shouldn't auto-assigning blame on "them".

paulddraperOP2y ago

> Why should they be allowed to walk away?

Because we decided ages ago that compelled labor is a bad idea.

shiroiuma2y ago

Again, try declaring bankruptcy, and then refusing to do any more paperwork or show up for the bankruptcy hearing with the judge, and see how it goes for you.

In fact, bankruptcy is a process that, if you follow the rules, is beneficial to you: you get protection from your creditors so that your loss is minimized. If you refuse to do the labor to follow this process, you won't have any protection and things will go badly for you. I don't see why it should be different for the owners and executives of a corporation. These people are not employees.

PawgerZ2y ago

Sorry to be pedantic, but according to the 13th ammendment, compelled labor is allowed as a punishment of crime.

To be real, if the executives at a company do commit crimes that lead to the failure of the company, I think they should be on the hook for that.

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Retric2y ago

paulddraperOP2y ago

> Receivership doesn’t even require

Cooperation of board/executives is not required but it is immensely helpful.

"The easy way" vs "the hard way."

pseg1342y ago

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shiroiuma2y ago

broken-kebab2y ago

paulddraperOP2y ago

> Why should they be allowed to walk away?

Because we decided ages ago that compelled labor is a bad idea.

shiroiuma2y ago

Again, try declaring bankruptcy, and then refusing to do any more paperwork or show up for the bankruptcy hearing with the judge, and see how it goes for you.

PawgerZ2y ago

Sorry to be pedantic, but according to the 13th ammendment, compelled labor is allowed as a punishment of crime.

To be real, if the executives at a company do commit crimes that lead to the failure of the company, I think they should be on the hook for that.

1 more reply

j / k navigate · click thread line to collapse