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View Diary: Hostess and union agree to mediation (52 comments)

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  •  It would be nice, though, if the court mandated (11+ / 0-)

    that the pensions which weren't funded must be fully funded before the vulture capitalists get their cut.  The pensions were agreed to before the vulture capitalists came around (I'm referring to what was promised to workers years ago) to loot the place by putting in CEO's who knew nothing about how the business ran.

    •  Bankruptcy law already defines the order creditors (1+ / 0-)
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      get paid, and the various creditors transacted business based upon this understanding.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Mon Nov 19, 2012 at 01:35:38 PM PST

      [ Parent ]

      •  Nope (7+ / 0-)

        I don't expect anything fancy to happen in the Hostess case. The financiers will be made whole and everybody else left screwed high and dry as usual.

        But there is nothing automatic in bankruptcy. That's why there are bankruptcies judges, not bankruptcies clerks.

        The law defines a default priority but the trustee has the power to object to each and every claim and kick them to the judge for hearing and trial. And claimants also have to right to stir shit up in front of the judge. And contrary to what bankruptcy judges love to say, they have a lot of leeway and very broad power to modify claims, to "recharacterize" them through equitable subordination, as the term goes (and a power reaffirmed in totality by the 4th circuit 6 years ago, btw, in a case of deferred billing downgraded all the way down to equity (ouch)).

        And if there is one case where any bankruptcy judge worth his salt would have the opportunity to make a pig's breakfast of the default priority, it would be Hostess Brands.

        But it's hard work. They have to conduct hearings, adjudicate the claims and motivate their decisions. So they don't like to do that. Way simpler to rubber stamp the default priority and claim to have their hands tied by the law.

        I deal in facts. My friends are few but fast.

        by Farugia on Mon Nov 19, 2012 at 03:03:33 PM PST

        [ Parent ]

      •  And The Workers Transacted Business.... (1+ / 0-)
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        ...under the understanding that they were earning a pension.

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