3 ms·

Just to clarify your point about paying out employees... in what sense do you mean that? Some quick googling says that when a company goes into Chapter 7, emplo

Just to clarify your point about paying out employees... in what sense do you mean that? Some quick googling says that when a company goes into Chapter 7, employees become creditors for their unpaid wages, which means that they are at least in the same boat as other creditors (although it seems like they might sometimes be prioritized).

jefftk 3y ago
Your source is talking about unpaid wages (legally mandatory), but severance is additional (legally optional) payments the company chooses to make to support former employees.
- IG_Semmelweiss 3y ago
  And equity is legally subordinate to both of the above.
  - hinkley 3y ago
    Creditors and vendors on the other hand, may not be.
    - pc86 3y ago
      * are definitely not
hinkley 3y ago
You will rudely discover that the landlord gets paid their early termination fees and any back rent before the employees see a single cent. Unfortunately I had to learn this the hard way (as in I was lied to and assumed they were still going to pay us, and then the payroll money went poof)
- shiroiuma 3y ago
  That sounds like bullshit (i.e., it shouldn't be this way, I'm sure you're correct). Being a landlord should entail a certain amount of risk: you're betting the tenant will be able to pay the rent, so you need to be careful choosing tenants, especially if they're companies, and moreso if they're companies with risky finances. Why should employees be prioritized below a property speculator?
  - AaronM 3y ago
    Because much like the house in the casino, the capital class always wins.
  - pc86 3y ago
    There are plenty of people who get paid out before the landlord, especially when you're several months in arrears as you almost always are in this situation. It's why in other markets landlords will be pretty quick to evict non-paying commercial tenants, there's a lot of risk and minimal personal guarantees unless it's a brand new business.

jefftk 3y ago

Your source is talking about unpaid wages (legally mandatory), but severance is additional (legally optional) payments the company chooses to make to support former employees.

IG_Semmelweiss 3y ago
And equity is legally subordinate to both of the above.
- hinkley 3y ago
  Creditors and vendors on the other hand, may not be.
  - pc86 3y ago
    * are definitely not

hinkley 3y ago

You will rudely discover that the landlord gets paid their early termination fees and any back rent before the employees see a single cent. Unfortunately I had to learn this the hard way (as in I was lied to and assumed they were still going to pay us, and then the payroll money went poof)

shiroiuma 3y ago
That sounds like bullshit (i.e., it shouldn't be this way, I'm sure you're correct). Being a landlord should entail a certain amount of risk: you're betting the tenant will be able to pay the rent, so you need to be careful choosing tenants, especially if they're companies, and moreso if they're companies with risky finances. Why should employees be prioritized below a property speculator?
- AaronM 3y ago
  Because much like the house in the casino, the capital class always wins.
- pc86 3y ago
  There are plenty of people who get paid out before the landlord, especially when you're several months in arrears as you almost always are in this situation. It's why in other markets landlords will be pretty quick to evict non-paying commercial tenants, there's a lot of risk and minimal personal guarantees unless it's a brand new business.