A Sqyuishy quest to further educate continues…
Update 2:
Pension Debt is unsecured debt. Like a credit card. Pretty sweet huh? So that money you were promised, gauranteed, poured your blood sweat and tears for, is worth less than the paper it was written on. It is an albatross tied around a companies neck going into or coming out of BK
Delaware’s BK Court heavily favors the Debtor (company filing bk) which means creditors get screwed, which means pensioners get screwed. (here that DuPont pensionee’s?) In fact courts want the big cases and show a bias to debtors to get those cases….Delaware stands out and NY too.
Pg 59: In the 1980’s companies found their pension coffers overflowing. That money wasn’t for pensions since it went above and beyond what should have been in there. Several companies went after that money: EXXON, UNION CARBIDE, PACIFIC LUMBER, OCCIDENTAL PETROLEUM
Pg 91 in 2006 Hedge Fund company Avenue Capital specializing in Vulture style debt management, gentlier called “distressed debt market” hired Chelsea Clinton
and finally for today….this quote:
“It becomes a factor you price into the deal. It’s not dissimilar to looking at an industry with an asbestos claims.”
Update: Here is some more stuff I and in turn you, have now learned:
Pg 14: “Officially Pension debt has lower priority than debts like taxes & lawyer’s fees; In practice it ranks even lower than the debts that are supposed to be equal in priority…pensions are actually the extras in a bankruptcy (BK) case.”
Pg 26-30 if you are in a 401(k) you are lucky….for now…they are next to go a decade or two from now
Pg 39 Pensions Actually started at the Railroad Companies the first one was offered in Canada (go figure) Grand Trunk Railway of Canada and the first in the US, American Express Co (then an RR) The pensions were set up to turnover aging workers and make room for younger labor.
Ok, so all those books you guys and gals recommended were checked-out at my uppity suburban Brandywine Hundred Library! I had to go with 2 other books and put myself in line for the other ones. I’m starting off with Cassandra’s recommendation. That one with Nixon in it looks fantastic!
I thought this book was a great find and it is very well timed too. LEST you think that what is going on with GM, FORD and CHRYSLER is only about the unions. As I understand it, I GM will be paying $85,000,000,000.00 over the next 10 years in Pension funds.
Geeeeeee, guess what DEBT is easier to shed than taxes, Creditor Debt, Trade Agreements? OHHHHHHH, that’s right the obligation a company has to its’ former employees. Wow huh? So shocking that is too learn aint it?
I am only at page 10 and already I have learned that the pension system is totally fucked so sorry, I cursed there…scrwed up beyond belief. The government takes over a companies pension plan when it goes bankrupt. We used to be plus $250,000,000,000. Now guess what we are? $250,000,000,000 IN THE RED!
Pretty sweet huh? So not only does the government pay Social Security it is paying the Pensions of Companies like Bethlehem Steel. (no not that city Jesus was born in allegedly) Pan-Am and about 3,448 other companies that were able to heap their obligations onto guess who? YES, tell him what’s he’s won BOB! MORE DEBT TO YOU AND YOUR LOVED ONES!!!
wooohoooo.
So let’s review what we have learned.
1. our Pension system is rigged to allow companies to drop that obligation to it’s own employees easier than it is for them to pay back its trade agreements.
2. You the taxpayer are paying for peoples pensions and there Social Security
3. The Big three are going to go bankrupt and heap more debt onto you
Lastly, guess what? The “investors” that will help bring a company out of bankruptcy and provide the capital for them to retool, restructure and provide a new plan, the FIRST THING THEY REQUIRE A COMPANY LIKE GM TO DO IS……..DRUMROLL……SHED THEIR PENSION PLANS!
it’s a win, win really.
I love free market capitalism. Don’t you?
Over the course of the week I hope to have other lovely and insightful nuggets for you to chew on. What I love best about this though, is how hard it is for you to file BK 7, but corporations have no problem at all.