Conquer Club

patches70 wrote:
What do they have to justify? Hostess wasn't run on taxpayer money, what they pay their people is no one's business. If they want to shell out $1.8 million, so what? It's their money, not yours (or PS, or NS).

A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.

aad0906 wrote:

patches70 wrote:
What do they have to justify? Hostess wasn't run on taxpayer money, what they pay their people is no one's business. If they want to shell out $1.8 million, so what? It's their money, not yours (or PS, or NS).

A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.

I thought it was the case the employees decided they would rather not continue working or getting paid 5% less.... ( by Hostess anyways).

aad0906 wrote:

patches70 wrote:
What do they have to justify? Hostess wasn't run on taxpayer money, what they pay their people is no one's business. If they want to shell out $1.8 million, so what? It's their money, not yours (or PS, or NS).

A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.

Of course they can't cherrypick. There is established bankruptcy law. Creditors come first. That's what certain people seem to forget or ignore. Those creditors being the those who are secured creditors (that includes shareholders) and they are first in line. Then come the unsecured creditors, that being the vendors (often) who get stuck real good often enough. Somewhere down the line after that is the union and the pension funds, who are pretty much fucked.
The sale propositions are contingent that the union is not included. For obvious reasons.

patches70 wrote:You want to extend sympathy to the workers? That's fine, but irrelevant. Hostess was some $850 million in debt. Their stock price dropped over 90% from the highs it once had. The company was dead. You can assign blame, but the real blame is that Hostess made products that are not in very good standing in today's concern about eating health and all that stuff. Hostess fell victim to the PSM trap, which affects companies, unions and nations alike.
When a Previously Successful Model fails it leads to only one of two choices. You either double down and pray it turns around, or you abandon the model and lose all the capital you invested in building it in the first place.

OR
Management does what it was hired to do, and manage the company, including coming up with ideas that WILL work with today's model.

patches70 wrote:I'll tell you why-
Guess who is really paying those bonuses anyway? The creditors. Not you.

Well, yes and no. Those unemployed workers will now be going on unemployment, foodstamps, medicaid, housing aid, etc. and who pays that? We do.

Further, because the company will be defaulting on its debts and instead, paying its faulty management extra incentive to stick around and "manage the bankruptcy" that their poor decision-making//lack of appropriate forsight and market planning caused, those creditors will be claiming losses instead of income, so they won't be paying the taxes they would have been paying, so who takes up the slack? We do. Plus, those creidtors themselves, missing out on the 1.8million in debt that will instead be paid to the piss-poor managers, may have to lay off some workers (who will then be going on unemployment, foodstamps, medicaid, housing aid, etc.). And who pays for that? We do.

Finally, because their pension plan is now gone, those who counted on it for income in their later years will be relying more heavily on social security, medicare, medicaid, food stamps, housing aid, and frequently seniors also get to apply for assistance with paying utilities (electric, water, gas, trash pickup) and who pays for that? We do.

patches70 wrote:Of course they can't cherrypick. There is established bankruptcy law. Creditors come first. That's what certain people seem to forget or ignore. Those creditors being the those who are secured creditors (that includes shareholders) and they are first in line. Then come the unsecured creditors, that being the vendors (often) who get stuck real good often enough.

Not quite.
First will come the judge-approved management bonuses. Then will come the lawyers. That will probably wipe out any remaining assets that aren't sold with the brand.

stahrgazer wrote:
OR
Management does what it was hired to do, and manage the company, including coming up with ideas that WILL work with today's model.

That ship has sailed, dude. I'm sorry you don't seem to understand the concept of the PSM, and that's how it becomes a trap. Because people don't see it in any other light than hindsight.

stahrgazer wrote:
Well, yes and no. Those unemployed workers will now be going on unemployment, foodstamps, medicaid, housing aid, etc. and who pays that? We do.

You want to cut unemployment, foodstamps and other entitlements? Welcome to the Republican Party!

stahrgazer wrote:Further, because the company will be defaulting on its debts and instead, paying its faulty management extra incentive to stick around and "manage the bankruptcy" that their poor decision-making//lack of appropriate forsight and market planning caused, those creditors will be claiming losses instead of income, so they won't be paying the taxes they would have been paying, so who takes up the slack? We do. Plus, those creidtors themselves, missing out on the 1.8million in debt that will instead be paid to the piss-poor managers, may have to lay off some workers (who will then be going on unemployment, foodstamps, medicaid, housing aid, etc.). And who pays for that? We do.

Welcome to the recession. Don't worry, taxes will be going up in a few weeks to make up for all this lost tax revenue.
LOL at "faulty management extra incentive to stick around and 'manage the bankruptcy'...."
You still aren't getting it, the judges decision is SOP in bankruptcy law.

stahrgazer wrote:Finally, because their pension plan is now gone, those who counted on it for income in their later years will be relying more heavily on social security, medicare, medicaid, food stamps, housing aid, and frequently seniors also get to apply for assistance with paying utilities (electric, water, gas, trash pickup) and who pays for that? We do.

Lemme guess, you would have supported a government bailout of Hostess instead? Again, here you are ignoring the shareholders and focusing only on the workers. Yeah, their situation sucks, but the shareholders with investments in Hostess are relying on having that money for their retirement as well.
That's what you don't get, the judge in a bankruptcy has to protect the legal parties. The creditors. Secured and unsecured, in that order.
Pensions are a benefit, not a secured debt. Don't you get that?
It's not like Hostess can just print money like government can to pay federal pensions.

stahrgazer wrote:Not quite.
First will come the judge-approved management bonuses. Then will come the lawyers. That will probably wipe out any remaining assets that aren't sold with the brand.

What part of "taking a haircut" don't you understand? Stop just repeating what I said and come up with an actual point or just say "I agree".
Looking at your ignorance of the process, is there any wonder lawyers and executives with experience in liquidation are needed? God forbid you were in charge of the liquidation, you'd be a disaster.
Hostess is a corpse, and like all corpses there is a picking order to the animals that feast on it. You don't have the wisdom nor the knowledge to reorder that picking order.

It would have been much worse for the long run if the government had stepped in and did for Hostess what it did for the auto industry.
Can you figure out why that would have been worse? If you can do that then you'll have answered your question (and illustrated my point) on why it's done like this.
It's for the best that it goes down like this. The sooner this dead company is liquidated the sooner someone new can step in and take over the niche. The former workers can then work for this new party, who hopefully will be better managed (and at the same time get off unemployment and all that other stuff your upset that "we"have to pay for).
The things you seemed worried about are short term, there is a bigger picture here that you can't seem to share because you are an ideologue. The class warfare BS is just noise and not at all close to be correct.

Point of order: shareholders are actually quite low on the list of those who will get anything back from a liquidated company. They are entitled to any residual equity after debts and other contractual obligations have been settled.

stahrgazer wrote:

patches70 wrote:You want to extend sympathy to the workers? That's fine, but irrelevant. Hostess was some $850 million in debt. Their stock price dropped over 90% from the highs it once had. The company was dead. You can assign blame, but the real blame is that Hostess made products that are not in very good standing in today's concern about eating health and all that stuff. Hostess fell victim to the PSM trap, which affects companies, unions and nations alike.
When a Previously Successful Model fails it leads to only one of two choices. You either double down and pray it turns around, or you abandon the model and lose all the capital you invested in building it in the first place.

OR
Management does what it was hired to do, and manage the company, including coming up with ideas that WILL work with today's model.

patches70 wrote:I'll tell you why-
Guess who is really paying those bonuses anyway? The creditors. Not you.

Well, yes and no. Those unemployed workers will now be going on unemployment, foodstamps, medicaid, housing aid, etc. and who pays that? We do.

it is my understanding that the employees chose unemployment... kind of ruins your point

Phatscotty wrote:

aad0906 wrote:

patches70 wrote:
What do they have to justify? Hostess wasn't run on taxpayer money, what they pay their people is no one's business. If they want to shell out $1.8 million, so what? It's their money, not yours (or PS, or NS).

A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.

I thought it was the case the employees decided they would rather not continue working or getting paid 5% less.... ( by Hostess anyways).

They thought it unreasonable that Hostess decide to cut THEIR pay, claim they could not do better -- while at the same time giving hefty bonuses to the executives. From the data I have seen, even one of those bonuses would have covered the employee demands.

That debate is really about how much workers deserve versus executives. The idea seems to be growing that workers are expendable and not worthy of anything more than pittances, and only executives really deserve payment.

Beyond that.. Hostess failed because it sells products heavy on lard and sugar, when the public at large is asking for healthier options that ALSO taste good.

In short, like many companies, the compensation for exectives had more to do with stocks and stock profits than maintaining a good production and quality product.

PLAYER57832 wrote:

Phatscotty wrote:

aad0906 wrote:

patches70 wrote:
What do they have to justify? Hostess wasn't run on taxpayer money, what they pay their people is no one's business. If they want to shell out $1.8 million, so what? It's their money, not yours (or PS, or NS).

A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.

I thought it was the case the employees decided they would rather not continue working or getting paid 5% less.... ( by Hostess anyways).

They thought it unreasonable that Hostess decide to cut THEIR pay, claim they could not do better -- while at the same time giving hefty bonuses to the executives. From the data I have seen, even one of those bonuses would have covered the employee demands.

That debate is really about how much workers deserve versus executives. The idea seems to be growing that workers are expendable and not worthy of anything more than pittances, and only executives really deserve payment.

Beyond that.. Hostess failed because it sells products heavy on lard and sugar, when the public at large is asking for healthier options that ALSO taste good.

In short, like many companies, the compensation for exectives had more to do with stocks and stock profits than maintaining a good production and quality product.

Damnit! I'm not making a statement about what can or can't be justified, or who deserves what, or what is fair and what isn't!

The statement is that the employees CHOSE to stop working. It was in their hands, they made it this way, that is why they are unemployed. all that means is the guilt trips and the finger pointing doesn't matter. Maybe their decision was the right one (I don't see how) maybe it was the wrong one (I think so), but the company could have stayed open, and the employees could still have their jobs (even if it's just a matter of time for Hostess)

Nobody likes quitters

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:

aad0906 wrote:

patches70 wrote:
What do they have to justify? Hostess wasn't run on taxpayer money, what they pay their people is no one's business. If they want to shell out $1.8 million, so what? It's their money, not yours (or PS, or NS).

A company that is bankrupt can not simply cherrypick who they pay what and who they don't. They can't one hand hand default on the $2Bn pension obligations to employees and on the other hand pay bonuses to executives. If these bonuses were in fact retention bonuses needed to keep people around for the liquidation then the judge was 100% correct in approving it but I just want to make the point that bankrupt companies DO by law have to justify their payments.

I thought it was the case the employees decided they would rather not continue working or getting paid 5% less.... ( by Hostess anyways).

They thought it unreasonable that Hostess decide to cut THEIR pay, claim they could not do better -- while at the same time giving hefty bonuses to the executives. From the data I have seen, even one of those bonuses would have covered the employee demands.

That debate is really about how much workers deserve versus executives. The idea seems to be growing that workers are expendable and not worthy of anything more than pittances, and only executives really deserve payment.

Beyond that.. Hostess failed because it sells products heavy on lard and sugar, when the public at large is asking for healthier options that ALSO taste good.

In short, like many companies, the compensation for exectives had more to do with stocks and stock profits than maintaining a good production and quality product.

Damnit! I'm not making a statement about what can or can't be justified, or who deserves what, or what is fair and what isn't!

The statement is that the employees CHOSE to stop working. It was in their hands, they made it this way, that is why they are unemployed. all that means is the guilt trips and the finger pointing doesn't matter. Maybe their decision was the right one (I don't see how) maybe it was the wrong one (I think so), but the company could have stayed open, and the employees could still have their jobs (even if it's just a matter of time for Hostess)

Nobody likes quitters

Except, when the corporation decided to shut down, they were very much pointing fingers and saying that the consequences to the workers just don't matter.

I pointed this out becuase you have generally taken a "its about freedom and the market" ideologue in general, but also often seem to want to support workers in some specifics.

My OVERALL opinion is that the company was going downhill because it had gone beyond a miche market and then not updated it product line to meet broader demand. I see this as just one example of problems with bigger companies. They may be more "efficient" for a time, but lose their overall ability to be flexible and meet demand. Most often, the "fix" is to use advertisement to try and shape demand... along with various measures to "simplify" and "streamline" -- (also seen as "cutting corners"). But that is getting off topic...

Excuse me, but I was under the impression there was a vote held by union members. What was that result?

Timminz wrote:Point of order: shareholders are actually quite low on the list of those who will get anything back from a liquidated company. They are entitled to any residual equity after debts and other contractual obligations have been settled.

Once a company goes bankrupt, yes. However, they get "theirs" in the company operation overall. Also, if a company is disbanded quickly and while still productive, then there should be enough left over after paying employees and other debtees for shareholders to gain something.

Further, in my point.. it is like saying that the middle manager won't get an income after he/she is fired or quits. Some managers do their best to follow upper management dictates. Others take what they can for themselves... and run. Not necessarily talking embezzling here, but more just getting what they can, not worrying about any problems they leave, and quickly and secretly getting another job, leaving problems for the successor to fix.

Phatscotty wrote:Excuse me, but I was under the impression there was a vote held by union members. What was that result?

Your point?

PLAYER57832 wrote:

Phatscotty wrote:Excuse me, but I was under the impression there was a vote held by union members. What was that result?

Your point?

What was the result of the union employee vote?

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:Excuse me, but I was under the impression there was a vote held by union members. What was that result?

Your point?

What was the result of the union employee vote?

They turned down the management offer, of course. But why do you consider that significant?

PLAYER57832 wrote:

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:Excuse me, but I was under the impression there was a vote held by union members. What was that result?

Your point?

What was the result of the union employee vote?

They turned down the offer

so who's choice was it to shut the company down?

I don't see how you can blame the workers for the shut down. Hostess filed Chapter 11 twice and lets say workers did take the pay cut, how would it be before management ask them to take another pay cut? 1 or 2 years? It was a failing company due to increase in price of materials and the fact that their products have no nutritional value.

PLAYER57832 wrote:

Timminz wrote:Point of order: shareholders are actually quite low on the list of those who will get anything back from a liquidated company. They are entitled to any residual equity after debts and other contractual obligations have been settled.

Once a company goes bankrupt, yes. However, they get "theirs" in the company operation overall. Also, if a company is disbanded quickly and while still productive, then there should be enough left over after paying employees and other debtees for shareholders to gain something.

Further, in my point.. it is like saying that the middle manager won't get an income after he/she is fired or quits. Some managers do their best to follow upper management dictates. Others take what they can for themselves... and run. Not necessarily talking embezzling here, but more just getting what they can, not worrying about any problems they leave, and quickly and secretly getting another job, leaving problems for the successor to fix.

I wasn't responding to anything you wrote. I was correcting a point patches made about shareholders getting paid before creditors.

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:Excuse me, but I was under the impression there was a vote held by union members. What was that result?

Your point?

What was the result of the union employee vote?

They turned down the offer

so who's choice was it to shut the company down?

Im not really a union kind of guy, theyre a pretty outdated concept now that we have many other, more appropriate, forms of employee protection. However the union turning down managements' offer is hardly equatable with them being the catalyst for the hostess failure.

You can just as easily say that managements low ball offer was what broke the company (however this is utter BS too).

What fucked hostess was good old fashioned shithouse management; sure the union didnt help, but no amount of employees sucking it up were likely to get them out of the hole they were in.

Lootifer wrote:

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:Excuse me, but I was under the impression there was a vote held by union members. What was that result?

Your point?

What was the result of the union employee vote?

They turned down the offer

so who's choice was it to shut the company down?

Im not really a union kind of guy, theyre a pretty outdated concept now that we have many other, more appropriate, forms of employee protection. However the union turning down managements' offer is hardly equatable with them being the catalyst for the hostess failure.

You can just as easily say that managements low ball offer was what broke the company (however this is utter BS too).

What fucked hostess was good old fashioned shithouse management; sure the union didnt help, but no amount of employees sucking it up were likely to get them out of the hole they were in.

So if the company was struggling due to decrease in demand combined with increase in costs(generally accepted explanation), why would this be the fault of management? If there is less profits to go around, everyone has to take a pay cut. The union employees went on strike as though they were somehow detached from the company as a whole so I would say that they are to blame for not being "team players".

A local Philadelphia bakery (in the vein of Hostess - Tastycake) was having similar problems a couple of years ago. I wonder if they are related.

Funkyterrance wrote:So if the company was struggling due to decrease in demand combined with increase in costs(generally accepted explanation), why would this be the fault of management? If there is less profits to go around, everyone has to take a pay cut. The union employees went on strike as though they were somehow detached from the company as a whole so I would say that they are to blame for not being "team players".

You're right there, and perhaps the union employees were viewing the pay rises the management were giving themselves and wondering where their pay rises were seeing as they were all part of the same team?

The "team player" argument is pure BS in this case beause it was management who were happy to award themselves rises and expected the workers to reduce their pay at the same time.

Nola_Lifer wrote:I don't see how you can blame the workers for the shut down. Hostess filed Chapter 11 twice and lets say workers did take the pay cut, how would it be before management ask them to take another pay cut? 1 or 2 years? It was a failing company due to increase in price of materials and the fact that their products have no nutritional value.

the workers gave up

Lootifer wrote:

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:

PLAYER57832 wrote:

Phatscotty wrote:Excuse me, but I was under the impression there was a vote held by union members. What was that result?

Your point?

What was the result of the union employee vote?

They turned down the offer

so who's choice was it to shut the company down?

Im not really a union kind of guy, theyre a pretty outdated concept now that we have many other, more appropriate, forms of employee protection. However the union turning down managements' offer is hardly equatable with them being the catalyst for the hostess failure.

Was there a different result from the union members turning down the offer that we are not aware of?