can i make a change to corporate bankruptcy laws?

[unblock]

here's my simple proposal:

persons affected:
- any c-level executive who works for a company that files bankruptcy
- any c-level executive who worked for a company in the 90 day period immeditately prior to a bankruptcy filing

consequences:
- affected persons gets a bankruptcy filing notice on their PERSONAL credit bureau files, where it remains for 10 years.
- affected persons cannot legally hold another c-level position for 10 years, or receive compensation in excess of the least compensated c-level executive.
- any public company that employs (or engages as an independent contractor, or does business with a company that hires an affected person) an affected person in ANY capacity must disclose this in all SEC filings.


i mean, let's put the stigma of PERSONAL bankructpy onto executives. then maybe, MAYBE, these people will act like bankruptcy is something other than a tactic to enriching themselves at the expense of creditors, employees, unions, customers, and common shareholders.

[Romulox]

1. I know where you're coming from, but your plan has unintended consequences

Namely, no executive will ever agree to work for a troubled company.

[unblock]

2. as any great leader does, i leave the details for others :)

at a minimum, someone who takes over AFTER a bankruptcy filing is not an affected person, so turnaround experts can still have their careers.

note that regular people still do file bankruptcy despite the stigma, when they have little choice.

executives would do the same. or they'd quit, which is just as well. it's highly likely that a company would benefit from different management at that point. the skills and contacts that are useful in a bankruptcy/turnaround situation are vastly different than at other times.

[gravity]

6. If someone was brought aboard to turnaround a company

before it goes into bankruptcy, they will be unfairly punished.

This will probably just encourage more bankruptcies just so they can clean out the old management and bring in the new, instead of hoping that new management can prevent the company from filing chapter 11 in the first place.

[LynzM]

3. I'd like to change....

the laws to include something like "the c-level executives may not be compensated greater than 10x the amount paid to the least-compensated employee..."

[unblock]

7. speaking of unintended consequences....

i imagine that executives would hire only other highly compensated workers, who would then be expected to not only make the company prosper, but also do their share of menial labor, because they ain't hiring no minimum wage workers.

anything else needed would be farmed out to another company with a lower-paid ceo.

[TexasObserver]

4. It's true that the perps of such companies walk away free.

The very bankers that made all the bad decisions pack up and end up at other banks. The goats are the borrowers, the debtors. They're the bad guy, not the banker who approved loan after loan.

At least that's the way our system treats it.

[gravity]

5. Many CEO's fail before running a successful company

It is apart of entrepreneurship and a lot of times it is outside the CEO's direct control.

I really don't think this change in law is going to provide any more incentives to prevent bankruptcies at all. 99% of the time, the CEO is trying to prevent bankruptcy anyways, and there is already personal stigma against running a BK company.

[Occam Bandage]

8. So basically, your plan encourages

CEOs to jump ship at the first sign of financial troubles ahead (say, if you're in the airline industry and oil hits $150/barrel), and all but forbids new executives from being hired by companies at risk. I get where you're coming from, but that would only encourage bankruptcy filings, as a company in trouble wouldn't be able to hire new leadership until they're in the post-bankruptcy safe zone.