4 ms·

Strangely there is always lots of talk about “profit sharing” and not “profit and loss sharing”. And I’ve never had to sign a business loan guarantee as an empl

Strangely there is always lots of talk about “profit sharing” and not “profit and loss sharing”. And I’ve never had to sign a business loan guarantee as an employee, but I’ve done so as a business owner.

webmaven 6y ago
> Strangely there is always lots of talk about “profit sharing” and not “profit and loss sharing”. That's because corporate limited liability shields stakeholders from losses beyond their sunk costs. As an employee, you probably are close to last in line behind most of the other creditors, and may have to just write off that last (missed) paycheck. But that paycheck you are never going to get is the full extent of your liability for the company's losses, even theoretically. Not that it encompasses all the risks you're exposed to (time not working, looking for a new job, etc.) But those are the same regardless.
- deleted 6y ago
  [deleted]
- sigstoat 6y ago
  > As an employee, you probably are close to last in line behind most of the other creditors, and may have to just write off that last (missed) paycheck. you're simply making things up. stop it. you can look up the hierarchy of creditors, and see where employee compensation lands. they're fourth priority, after domestic support obligations (probably not relevant to a business), administrative expenses (gotta pay the courts and court-appointed bankruptcy trustee), and claims from involuntary bankruptcy. employee benefits are in the fifth priority. there are four more priority levels (6 through 10), and then all of the unsecured creditors.
  - webmaven 6y ago
    Look, businesses don't go bankrupt completely out of the blue. There are so many ways to ensure that various parties get their pound of flesh while loading up the company with additional liabilities that it is ridiculous. Sure, technically employees are near the top, but that doesn't help if all the cash and assets are long gone.

webmaven 6y ago

> Strangely there is always lots of talk about “profit sharing” and not “profit and loss sharing”. That's because corporate limited liability shields stakeholders from losses beyond their sunk costs. As an employee, you probably are close to last in line behind most of the other creditors, and may have to just write off that last (missed) paycheck. But that paycheck you are never going to get is the full extent of your liability for the company's losses, even theoretically. Not that it encompasses all the risks you're exposed to (time not working, looking for a new job, etc.) But those are the same regardless.

deleted 6y ago
[deleted]
sigstoat 6y ago
> As an employee, you probably are close to last in line behind most of the other creditors, and may have to just write off that last (missed) paycheck. you're simply making things up. stop it. you can look up the hierarchy of creditors, and see where employee compensation lands. they're fourth priority, after domestic support obligations (probably not relevant to a business), administrative expenses (gotta pay the courts and court-appointed bankruptcy trustee), and claims from involuntary bankruptcy. employee benefits are in the fifth priority. there are four more priority levels (6 through 10), and then all of the unsecured creditors.
- webmaven 6y ago
  Look, businesses don't go bankrupt completely out of the blue. There are so many ways to ensure that various parties get their pound of flesh while loading up the company with additional liabilities that it is ridiculous. Sure, technically employees are near the top, but that doesn't help if all the cash and assets are long gone.