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>So they quit I doubt most of the executives see themselves as personally responsible for the financial situations of their companies, especially during an unp
by lend000 6y ago
>So they quit
I doubt most of the executives see themselves as personally responsible for the financial situations of their companies, especially during an unprecedented global economic shutdown. Not because they are any different from you or me or any of these other self righteous commenters, but because they are the same.
If American culture were more like ancient samurai culture, perhaps they could commit seppuku to restore their honor. But I would prefer to restore proper incentives instead, and weaken the power of chapter 11 so this isn't a problem in the first place.
- computerphage 6y agoIt wasn't unprecedented.
- sgt-serverless 6y agothe pandemic may not have been, but the scale to which businesses were shutdown was.
- texasbigdata 6y agoLook at the Bain 2020 annual “private equity” report. Back of the envelope math, at 10x purchase price and 7x leverage, 10 to 15% of revenue goes to debt coverage costs and a 5% revenue decline triggers the bank covenants and causes a technical default. It’s the executives fault that happened? Maybe it is, but the capital structure and the operating team are separate and distinct things. It’s also important to consider, if the bank debt can’t convert to equity via a ch11, then overall availability of capital will sharply decrease. Which in turn hurts every business around.