2015.08.28Advice for Directors & Officers of Distressed Corporations. This Inside Counsel Article (by Poerio et al) focuses on executive compensation issues.
See BAPCA Section 503 re incentive, retention, and severance payment restrictions applicable to select executives.
2018.01.25 RSUs result in Equity Claims; subordinate to general creditor claims. That is the holding of the 2nd Cir. in Acerra v. Giddens dismissing bankruptcy claims by former Lehman executives.
2017.05.02 From Law360: "F-Squared Trustee Seeks To Claw Back $2M From Co-Founder" -- The liquidating trustee for F-Squared Investments Inc.’s bankruptcy estate launched an adversary action Tuesday in Delaware bankruptcy court looking to claw back roughly $2 million in bonuses paid to co-founder and former managing director Vadim Fishman before the company sought Chapter 11 protection, arguing the compensation constitutes a fraudulent transfer."
"Severance Pay Not Always Safe From Bankruptcy Clawback" (Law360, 11/5/2015). Toward the beginning of this excellent article, it is written:In Weinman v. Walker, the board of Adam Aircraft Industries decided to replace its president and board member, Joseph Walker. To avoid potentially disrupting ongoing negotiations for debt financing, the board asked Walker to resign. Walker agreed and the two parties subsequently negotiated a severance package that included the refund of Walker’s airplane deposit and stock investment (approximately $200,000) and consultant retainer payments for 18 months ($375,000). In return, Walker entered into a noncompete agreement and released all potential claims against AAI. A year later, AAI declared bankruptcy and the bankruptcy trustee sued to recover transfers made to Walker under the severance agreement.
2009.11.10 Deferred Compensation Yields only Unsecured Claim despite Rabbi Trust. Executives who deferred salary argued for legal and equitable relief that would restore their deferred compensation. The ND Alabama Bankruptcy Court held however that neither the plan nor the rabbi trust gave them rights other than those of general unsecured creditors. In re Bill Heard Enterprises.
(2) WARN Act
2015.09.21 WARN Violations Could Result in Personal Liability for Directors & Officers. In Stanziale v. MILK072011. Delaware's Bankruptcy Court denied a motion to dismiss claims that a bankrupt company's officers and directors should be held personally liable for a breach of fiduciary duties. See WARN ACT and Bankruptcy.