Category Archives: if you aren’t outraged you aren’t paying attention

bankruptcy Catch-22

In re BearingPoint Bankruptcy;

First off, IANAL, but my analysis seems to jive with the judge’s actions (and inactions) and what has been argued by legal teams on both sides.

Ex-BearingPoint employees seem to be asking…

“Why can’t the judge just instruct the PTO to be paid out?”

In the Bankruptcy law, Section 507,  it specifies the priority of claims.  ‘Fourth-tier’ claims are “allowed unsecured claims” which include “wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual”.  Our accrued Personal Time Off (PTO) would fit this description.  The code specifies a limit of $10,950 and anything above and beyond ($11K+) is considered an unsecured claim, and it gets lumped in with all the general creditors. That is both codified law (Section 507) and tested/demonstrated in precedent (referenced in the objections by the Creditors in #688 “Order to Vacate” — see a list of references at the end).

So for those of us owed under $10K, the good news is that we are in line to get it.  The bad news is it’s not considered an “administrative expense” (expense to keep the business going thru bankruptcy), and so it is to be paid out once the firm liquidates (Chapter 7 Bankruptcy).

“Why can’t the judge instruct that PTO under $11,000 be paid out immediately/ASAP?”

The reason is that only administrative expenses can be paid out right now (§ 503).  503(b)(1)(A) specifies “wages, salaries, and commissions for services”, but makes no mention of vacation or severance, as was specfically indicated in section 507.

The reason that PTO payout is not an admin expense seems to be a kind of catch-22; it’s obviously important to the ongoing operations to keep employees on-board; but once the employee is terminated (which would trigger the PTO payout) the PTO payout doesn’t provide any benefit to the company (or the creditors) — after all, the ex-employee is no longer contributing anything to the company. The promise of the PTO payout is a benefit, but the actual payout isn’t — see the distinction there? And while the judge controls the $$, he doesn’t control the actions/promises of executives, so there is no real remedy that the judge can offer.  If he allows the payout to , it denies the creditors their rightful claim to the money in liquidation.

So, we have to wait for liquidation (Chapter 7).

“How is this fair?  I earned that vacation time…”

I couldn’t agree with you more.  It’s not fair.

The lesson to be learned here — and this is a lesson for all employees everywhere — is that if you ‘bank’ vacation time, you have to consider that vacation time is at some risk.  One letter to the judge, by someone who I followed on the corporate wiki and respect and who I don’t mean to criticize, stated (emphasis mine):

The Debtors* [sic] entered into a risk-based investment with BearingPoint and stand to lose those investments.  The BearingPoint PS Group employees took no risk. We worked hard, earned the PTO… and now we just want what we were promised.

* I’m pretty sure he meant Creditors, those who extended loans or bonds to BearingPoint.

Well… that’s like saying I took no risk driving to work today:  I drove within the speed limit, I stopped completely at every stop sign, I wore my seatbelt, I have airbags… so it’s riskless, right?  We all know that just getting in your car in the morning includes an assumption of risk, and signing on to work for any firm or organization has to include a similar assumption of risk.  Continuing to stay on with BearingPoint through the past few years was an implicit acceptance of an increasing amount of risk…  and I know, I did the exact same thing, underestimating the risk involved each step of the way.

“How is this fair?  Those executive are getting bonuses for selling off the pieces and we get nothing!”

Yeah, this one is tough to swallow, but it makes sense if you look at the bankruptcy framework.

Those bonuses are related to selling off pieces of the company and bringing in cash, cash that will go to creditors.  That sounds like it would fit “commissions for services” per 503(b)(1)(A).  And ultimately that cash goes to the creditors, and the PTO payout is fourth-tier priority on that money — so we should get it before the Committee of Unsecured Creditors.

An optimistic (kool-aid flavored?) spin would be this:  “we needed the execs to sell off the pieces so there will be any money left when we go to liquidation; if we didn’t throw them a bone to make that happen, we would have virtually zero-chance* at getting up to paid for our PTO… (the up-to-$10K part)”

[* there I go again, thinking we have a greater-than-zero-chance at this moment in time…  mmmm, kool-aid.]

Seriously, this makes me sick, but it seems to be legal and legit.

“But I’m mad as hell; what can we do?”

Unfortunately, I don’t think sending letters to the judge is going to change anything.  There is the bankruptcy code, and legal precedent, and beyond that the judge doesn’t have the latitude to do what many ex-employees are asking.

There have been claims, in letters and in the objections by Deloitte, that failure of the judge to act will set a precedent and that in the future employees might be denied these kinds of payouts.  The truth is, at least from what I can see, our case is proceeding according to existing precedent — I can see no reason why BearingPoint management should have assumed that PTO would be considered an adminsitrative expense.

It seems that BearingPoint bankruptcy lawyers should have known this was the probable outcome.  They had to know pretty early on that there were some people with way more than $10K in PTO — this should have raised a flag for them.

If (and this is a big if) it can be proven that management (Harbach) was told by the lawyers that this was the probable outcome, and he continued to state to employees that he thought PTO would be paid out on termination, knowing full well that our continued service would mean higher value for the assets and therefore a bonus for himself — is this enough to add up to Fraud?  Not just a fraud, like we all know it’s a fraud, but real criminal Fraud?

If the lawyers missed it, maybe we can get back some of the legal fees for their negligence.  Or is that just getting desperate?

“What does fourth-tier priority unsecured mean?”

Paraphrasing Section 507, the priorities are:

  1. Spouse and Child Support (I guess the same code applies to personal bankruptcy as to corporate bankruptcy).
  2. Administrative Expenses allowed under section 503(b).
  3. Unsecured claims allowed under section 502 (f) — this gets a little convoluted.
  4. Allowed unsecured claims for wages, salaries, commissions, and vacation.
  5. Allowed unsecured claims for contributions to an employee benefit plan.
  6. Allowed unsecured claims of persons engaged in the production or raising of grain, or engaged as a United States fisherman.  (Seriously.  Crazy specific get worked into these laws, no?)
  7. Allowed unsecured claims of individuals of money in connection with the purchase, lease, or rental of property, or the purchase of services.
  8. Allowed unsecured claims of governmental units.
  9. Allowed unsecured claims based upon any commitment by the debtor to a Federal depository institutions regulatory agency.
  10. Allowed claims for death or personal injury resulting from the operation of a motor vehicle or vessel if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance.

After all that, then I think the creditors get to fight over the scraps.

—————–

alright, that’s it for now.  if there is any good news, it’s that liquidation may happen by the end of this week, so at least we’ll have some closure.

Links

SaveMyPTO.com was a blog set up to rally employees.  There are only really three posts, and the comments have fallen victim to spam.  Still, there is some useful content in the early comments:

BearingPointInfo.com has the case docket and all the petitions, objections, and letters to the judge:

  • First Day Motion to pay Employees Wages, Salaries, and Benefits (#9)
  • Motion of Order to Vacate Severance and PTO (#688)

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Filed under cathartic, debunking, if you aren't outraged you aren't paying attention, law, money money money money, property rights, shenanigans

AT&T: Hands Off My Earned Leave!

You heard me Ma Bell.  You too Mellon Bank

BACKGROUND

This is going to be brief, but here’s the gist of it:

  • the company I worked for went into Bankruptcy
  • from the beginning we were assured that wages and accrued Paid Time Off (PTO) would be paid
    • THIS WAS CRITICAL because if 15,000 people started using up the PTO they had accrued, the entire company would have fallen apart before it could have been pieced-out and sold-off
    • it was also policy to pay out PTO if you left the company; there was no “use it or lose it”
  • now the Committee of Unsecured Creditors has objected to the PTO payout, calling them “golden handshakes” and bonuses
  • … nothing could be further from the truth — those who accrued the most hours are those who worked the hardest for the company, and for the creditors during this bancruptcy period — people who put off vacations and time off to BILL HOURS to clients which is the sole source of revenue for the company.  It’s painfully ironic that those who worked hardest are positioned to lose the most…
  • for the record, I wasn’t one of those working the hardest — I used 101% of my annual PTO last calendar year; and I still had over 90 hours in the bank when I left…

Many of my colleagues are writing to the judge to explain their position and situation — that’s all well and good, but there seems to be a very real chance that the judge could find legal reasons to support the objection.  Changing that one man’s mind seems like a slim chance to me…

It’s getting a little late in the process, but it just occurred to me that maybe we can find support in the employees of the Committee members, or in their customers.  Do you want to work for, or give your consumer dollars to, a company that demonstrates such disrespect forhard working employees and their families?  Especially in the middle of a recession?

CALL TO ACTION

  1. If you work for AT&T, tell management that you are aware of this situation and you think it’s a shame.  Feel free to email your corporate lawyers at James.Grudus@att.com (full address below).Mellon employees and customers:  same thing, and Mellon’s lawyer is at david.m.kerr@bnymellon.com

  2. If you agree that this is wrong and want to spread the word:
    LINK TO THIS POST; blog about it, email the link, etc.
    TWEET it — I don’t get fully get twitter, but have at it.
    Visit SaveMyPTO.com for more viewpoints and updates
    If you are a lawyer or legal buff, the case dockets are at BearingPointInfo.com

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Filed under angry, cathartic, corporate rebellion, cuz I'm on a roll, damn lies, debunking, desperate, if you aren't outraged you aren't paying attention, money money money money, property rights, rant, sad

[untitled]

so I walked the long walk across the parking lot from our client site, thinking I’d treat myself to a Baconator.  the line is suprisingly short, and the gentleman at the register places his order.  nothing out of the ordinary…

then the gentleman turns to his companion (likely his daughter).  she has a cell-phone up to her ear, and rattles off her order: one of their super-deluxe salads I think (I honestly don’t remember).  then she orders a cheeseburger, or something.  (ordering details from this point forward get fuzzy, as my rage builds.)

then she cancels that burger.  she asks the cashier for clarification on the #2, does that come with [something]?  the cashier says yes, she says yes into the phone, the voice on the phone says OK (I can only imagine), and she says OK.  “does it come with cheese?”  same cycle of relaying information through the cell phone…

“so what would your brother like,” she asks…

I’M STANDING BEHIND A WOMAN WHO IS TAKING HER ORDER FROM HER KIDS OVER HER CELL PHONE — NOT AHEAD OF TIME, BUT IN FRONT OF THE REGISTER WHILE A LINE OF PEOPLE GATHER BEHIND HER.

now, I’ve waited behind people writing checks at the grocery store, and I’ve stood behind people that dispute their charges to the cash register, but this was ABOVE AND BEYOND.  I cleared my throat a few times, hoping she’d realize there were people behind her.  I made eye contact with the cashier as if to say, “uh, can you move us along…” and no dice.

apparently unable to get the order translated through her other child, she says “well, then put him on.”

I burst out, “OH COME ON! You’ve got to be kidding me!”  She doesn’t flinch.

“Seriously,” I plead to the cashier, “you’ve got to ask her to step aside and write down her order.”  I say this because she has been writing down the order on a napkin the whole time, and is using it to verify the order with the cahsier — 50% of which is wrong each time, and they have to start again.

I know this has only taken 30 seconds to describe to you, but it was no less than several minutes in line.  the cashier shrugs, the b*tch on the phone is oblivious, and waits for her other kid to get on the phone and place his order.  and another kid.

the next five minutes are a bit of a blur, as there is discussion over what comes on a 1/4 single with cheese, etc, etc — all of it being relayed from cashier to customer to her kid (via cell phone) to customer to cashier.  oh, and then she wants a baked potato, but gets all high-maintenance about what is going on it.  bacon?  LIKE SHE DOESN”T REALISE SHE”S AT A WENDY”S…

the kicker, the really really aggrevating thing, is that at the end of all of it she didn’t even attempt to make nice.  she didn’t hang up on her kids and say, “sorry” to the rest of us.  and this really wasn’t a 30-second delay, it was a good chunk of the 30-minute lunch break I was giving myself before some other meeting back at the office.

I understand that the Baconator is engineered by the good people at Wendy’s to crank my blood pressure up to (something horrifically bad), but this time it was there before I even placed my order.

luckily, nothing a little ‘mayo on the side’ couldn’t cure.

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Filed under angry, cathartic, customer service, if you aren't outraged you aren't paying attention, rant

overheard at the Germantown Oktoberfest…

“and I can end the planet in a holocaust
In a holocaust
In a holocaust
In a holocaust
In a holocaust
In a holocaust”

now I realize they were covering a recently popular song (Handlebars by the Flobots), but even if it’s the song they cover the best, they ought to have some sense of context.

perhaps the misguided youth onstage have no idea what World War II was, or the fact that Germans were involved, or the irony of screaming out these lyrics at a festival celebrating German heritage.  they probably think the Bush regime is a ‘holocaust’ and don’t realize that the word has very powerful meaning to other people.  or maybe they get it, and they’re just sticking it to the man.  the rest of their set was all RageAgainstTheMachine-y, so I assume they all just think they’re as smart as Zack de la Rocha.  (that was a joke.  though I have been known to Rage…)

walking out of the park, we passed a middle-aged woman with a shirt that simply read “Blame Republicans”.  I was surprised to hear my wife mutter, “why?  the Democrats are in charge in Congress, seems like they ought to get the blame…”  wow, like words from my own mouth.

and made me think up a t-shirt that I might get printed:

YOUR T-SHIRT
ONLY SERVES TO BROADCAST
YOUR IGNORANCE

of course, I’m not sure what that message sends about the wearer; and I would be stymied if I ran into that guy with the “I’m rubber, your glue…” t-shirt.  man, I hate that guy.

Handlebars video (lyrics below):

I can ride my bike with no handlebars
No handlebars
No handlebars

I can ride my bike with no handlebars
No handlebars
No handlebars

Look at me, look at me
hands in the air like it’s good to be
ALIVE
and I’m a famous rapper
even when the paths’re all crookedy
I can show you how to do-si-do
I can show you how to scratch a record
I can take apart the remote control
And I can almost put it back together
I can tie a knot in a cherry stem
I can tell you about Leif Ericson
I know all the words to “De Colores”
And “I’m Proud to be an American”
Me and my friend saw a platypus
Me and my friend made a comic book
And guess how long it took
I can do anything that I want cuz, look:

I can keep rhythm with no metronome
No metronome
No metronome

I can see your face on the telephone
On the telephone
On the telephone

Look at me
Look at me
Just called to say that it’s good to be
ALIVE
In such a small world
All curled up with a book to read
I can make money open up a thrift store
I can make a living off a magazine
I can design an engine sixty four
Miles to a gallon of gasoline
I can make new antibiotics
I can make computers survive aquatic conditions
I know how to run a business
And I can make you wanna buy a product
Movers shakers and producers
Me and my friends understand the future
I see the strings that control the systems
I can do anything with no assistance
I can lead a nation with a microphone
With a microphone
With a microphone
I can split the atoms of a molecule
Of a molecule
Of a molecule

Look at me
Look at me
Driving and I won’t stop
And it feels so good to be
Alive and on top
My reach is global
My tower secure
My cause is noble
My power is pure
I can hand out a million vaccinations
Or let’em all die in exasperation
Have’em all healed of their lacerations
Have’em all killed by assassination
I can make anybody go to prison
Just because I don’t like’em and
I can do anything with no permission
I have it all under my command
I can guide a missile by satellite
By satellite
By satellite
and I can hit a target through a telescope
Through a telescope
Through a telescope
and I can end the planet in a holocaust
In a holocaust
In a holocaust
In a holocaust
In a holocaust
In a holocaust

I can ride my bike with no handlebars
No handle bars
No handlebars

I can ride my bike with no handlebars
No handlebars
No handlebars

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Filed under if you aren't outraged you aren't paying attention, music, politics

Strangeways, here we come

[maybe if I wrote this two weeks ago when it first occurred to me, it would have sounded half-way original.  but instead a quick Google brings up my exact thoughts as written by The Zone Blitz…]

the NFL network is using Morrissey’s “Everyday is like Sunday” to promote their “NFL Replay” service/option/channel (something).  it’s (almost) brilliant — with NFL Replay, you can watch any game any day of the week, so everyday IS like Sunday!! kind of like if you pumped a Tivo full of steriods, enabling it to record 15 games every weekend…

but aside from the title/refrain, this song is the antithesis of the NFL.  it’s mopey, dark, artsy, and unapologetically nihilistic.  lyrics:

Trudging slowly over wet sand
Back to the bench where your clothes were stolen
This is the coastal town
That they forgot to close down
Armageddon – come armageddon!
Come, armageddon! come!

Everyday is like sunday
Everyday is silent and grey

Hide on the promenade
Etch a postcard
How I dearly wish I was not here
In the seaside town
…that they forgot to bomb
Come, come, come – nuclear bomb

Everyday is like sunday
Everyday is silent and grey

no joke.  the video is below.  Mouth Piece Sports rightly called the NFL usage ‘bastardized’:

Morrissey, one of the saddest vocalists of the 20th century, writing a postcard to no one and wishing for nuclear death because life is just that miserable. Wooo! Are you ready for some football?!

Violent Femmes “Blistered in the Sun” for Wendy’s, Stone Roses spread the love for Cadillac, Iggy Pop was used to convince boomers to fulfill their “Lust for Life” on (royal) carribean cruises.  we live in weird times.

[Headline reference; I always thought Strangeways was a mental institution, go figure; and Strangeways was Moz, not The Smiths, I realize that.]

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Filed under dumbfounded, if you aren't outraged you aren't paying attention, nostalgia

Thomas Friedman wants you to pay more for energy

I can’t say it any more clearly than that.  Watching Meet-the-Press, he advocated that government should mandate a certain percentage of electricity be generated from renewable sources.  The only reason that they would need to be mandated is that they are more expensive, which power companies would avoid in order to reduce their costs*.  If renewable sources were more cost-effective, then energy companies would already be using them (or moving to them) to displace dirty-dirty-coal energy.  In fact, this is the case in some areas, namely where hydro-electric power is a big contributor.  Which raises the question — why doesn’t anyone talk about hydro-power anymore?  Now it’s all solar and wind farms… did Hydro cease to be a renewable, clean, technology?  Just curious.

Did anyone tell Friedman, or the rest of the alternative-energy loving population, that we’re in the middle of a financial and economic crisis?  If McCain claims that the economy is ‘fundamentally sound’, they’ll rip into him for being out of touch.  How is this any different?**

Anyhow, as long as mandates are driving adoption, you’re only going to get the minimum amount of ‘alternative’ energy sources to meet the mandate.  Above and beyond that, power companies exist to make a profit, and for the most part consumers are going to choose the least expensive energy option.  (Of course, there are some outliers who will pay more for alternative energy our of some sense of duty, guilt, or piety.)

Friedman’s hope is likely that by forcing enough power to alternative energy sources, there will be some innovation in alternative energy production that will radically change the game.  I’m not sure if there are any examples of this working in the past:  MPG mandates on automobiles have not encouraged innovations that created huge gains — even hybrids are barely enough to keep entire manufacture fleets above their EPA standards.  If federal mandates magically pushed us through these types of barriers, we’d all be driving 100 mpg (likely 100% internal combustion, since hybrid’s are more complicated than they’re worth) cars.  Or electric cars that go farther than 40 miles per charge…  Seriously, how that dinky little Smart car gets less than 100mpg, I’ll never understand.

OK, so MPGs was only one example — if anyone has an example of a federal mandate spontaneously causing leaps in innovation, I’m all ears.  And no, the government never mandated anything related to TCP/IP adoption…

Friedman: “What I say is if climate change is a hoax, it’s the greatest hoax ever perpetrated on the United States of America.” (which I thought was a Jesus reference, but now Google seems to be betraying me and not indicating the original source of the phrase; only recent antecendants).  He made this reference as though it was proof that global warming is real (after all, it couldn’t be an elaborate hoax!), completely oblivious to the fact that many reasonable people think otherwise.

“Because everything we would do to get ready for climate change, to build this new green industry, would make us more respected, more entrepreneurial, more competitive, more healthy as a country.”  Respected for falling for an elaborate hoax?  Entrepreneurial for developing solutions to a problem that doesn’t exist — and that in the end nobody is going to want to pay more for?  More competitive by investing more in basic scientific research? — OK, that might actually be valid, but if global warming is a hoax and we fund science aimed at solving global warming problems (ie. a level or two above basic science, like building a better hybrid-engine) then we miss the boat on that.  More respected?  Do you think the truly poor in the world have a huge amount of respect for us, while they starve, knowing that we’re spending discretionary dollars on wind-generated energy instead of dirty coal?  Do you think they’re thinking, “gosh, I’m hungry today, but at least American’s are treating the planet better”?  I’m guessing they’d rather have a full belly.  Better to buy dirty energy, send our savings to Africa, and sustain a young life that might solve some entreprenurial problems closer to his own home; and which might spill over to the rest of the world.

[quotes from Meet the Press transcript]

* let me state this another way:  if alternative energy sources were already more cost-effective, power companies would be turning to them en masse to reduce their energy costs and extract more profits from consumers.  the fact that this is not so is proof that alternative sources cost more (fully-loaded, lifecycle costs; not marginal costs)

** I know, I know; just as they’ll call for alternative energy mandates, and at the same time call for subsidies or exceptions so the poor won’t have to bear the burden.  so the Rich will pay all the alternative-energy excess…  and in their eyes it couldn’t be more fair than that.

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Filed under debunking, dumbfounded, economics, energy policy, global warming, if you aren't outraged you aren't paying attention, pick any two, politics, reasons to homeschool, stupid government, whatnot

Best Hockey Songs of All Time #2: Hockey Night In Canada Theme

The reason I have delayed on #2 and #1 is that I wasn’t sure which should get top billing.  My decision was made even more difficult when I tried to find an appropriate version of the song on YouTube…

What the hell happened to the HNIC theme song?  Who was the ass-clown at the CBC that decided that a Nickelback cover of an Elton John song was appropriate to introduce a hockey game?  I won’t even link to the video versions of this abomination that I found, it’s just too painful, but rest assured that hockey isn’t just all about fighting (even if it is Saturday Night — oh, how clever!).  It’s an important element to the game, but to make it the focus of the theme song — and to get Nickelback involved — ugh.

So here is my #2 choice: The CBC Hockey Night in Canada Theme Song, [alternate high-school-band version here]:

Bonus: Peter Puck.  When I was young, I couldn’t follow the puck on TV, and Peter Puck was the main reason I watched the game.  Later, I became an American; ‘traded’ to the U.S., if you will… coincidence?  I think not.

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Filed under dumbfounded, hockey, if you aren't outraged you aren't paying attention, music, nostalgia