4 ms·
> Claimants of wrongful arrest suits before the bankruptcy are left fighting a shell company left behind to handle the remaining debts of Hertz. ^ This is the
by jawns 4y ago
> Claimants of wrongful arrest suits before the bankruptcy are left fighting a shell company left behind to handle the remaining debts of Hertz.
^ This is the final paragraph, but I wish the story went into more detail about it.
The plaintiffs' lawyer alleges that there have been more than 300 cases of wrongfully arrested customers since 2015, and that most of those cases were subject to the bankruptcy proceedings.
So there are likely 150+ people who would ordinarily be able to seek recompense from the company -- but because it went through the bankruptcy process, now they get to wrestle with a shell company that has been crafted to protect Hertz as much as possible from financial liability.
Meanwhile, the company gets to carry on and -- as this lawsuit shows -- commit the same injustices after emerging from bankruptcy.
- fatneckbeardz 4y agothis has become standard practice in corporate America. It's done a lot with environmental damage: https://www.gsb.stanford.edu/faculty-research/publications/environmental-spinoffs-attempt-dump-liability-through-spin-bankruptcy https://www.gsb.stanford.edu/faculty-research/publications/e...
- londons_explore 4y agoI think this would be fixed by allowing lawyers in legal cases to make 'unusual' requests (ie. that this be paid for by the new owner of the Hertz brand, not the original company). If the Jury agrees that it's a good plan, even if the ownership structure normally wouldn't mean that party has that liability, then the judge makes that order. That could also cover cases like 'person X shields themselves with an LLP', or 'bob gave all his money away to Fred before declaring bankruptcy' (go after Fred instead). It makes the law 'less strict' about exactly who needs to pay, and gives Jurys more room for whatever they think is 'fair'.
- redeeman 4y agothis seems like it could quite easily cause some extremely gross situations
- tarakat 4y agoSomething similar to your suggestion is in fact an (albeit rare) legal possibility: https://en.wikipedia.org/wiki/Piercing_the_corporate_veil https://en.wikipedia.org/wiki/Piercing_the_corporate_veil
- tsol 4y agoSeems like it can be exploited and misused to terrible effect as well though