Avaya's $3.7m bankruptcy bonus plan slammed by watchdog The US federal bankruptcy watchdog has slammed telco Avaya for its decision to award 11 execs $3.7m (£3m) in bonuses after the company filed for bankruptcy protection earlier this year. The US Trustee told a New York bankruptcy court that under the Bankruptcy Code, bonus payments to insiders of the type sought "are subject to …
We must incentivize the execs lest they abandon the ship in its greatest hour of need.
And when the tide floods it is only fair that we help them celebrate how well the ship floats.
And in between times it's imperative that we reward their presence, lest they be captured by another firm
You can tell that these execs are not cut from the same cloth as you or me, for it's common knowledge that we're motivated more by the challenge than by material rewards...
And these will be the VERY same people that tell everyone they need to work harder and can't give you a raise this year because of some trivial infraction of your daily duties.
Funny how the 21st century looks a lot like the 19th century.
You'd almost think they'd never heard of Marie Antoinette.
This appears to be all part of a financial game played by Silver Lake.
Silver Lake set up a LBO to take Avaya private, then loaded it up with debt. They put in a management team to extract all of the value. The management left an debt-laden empty husk of a company they could put into bankruptcy for the tax credits.
The management was working on Silver Lake's financial scheme, not on making Avaya a successful company.
Sliver Lake Partners - weren't they the one's Micheal Dell joined up with to take Dell private...
And then used to help him takeover EMC to create Dell-EMC, now dubbed Dell Technologies, which according to Fortune magazine:
And thanks to Dell’s financial engineering, it has a Texas-size pile of debt stuffed into its saddlebags.
[http://fortune.com/dell-emc-merger-tech-biggest-deal/ ]
I wonder when Dell Technologies will enter Chapter 11...
Having previously been on the receiving end of Silver Lake's ownership it wouldn't surprise me. Fortunately in my case all they did post-purchase was cut costs to the bone, invest sod all and then flog for a very nice profit. So when the placed CEO said something along the lines of "I'm investing my children's future", then I'm sure his kids ended up being well-funded at a suitably expensive US university.
$6.3 billion in debt is 150% of their revenue... The point of having a CFO is to prevent the company from doing some egregiously irresponsible with the company's money. So either the CFO dropped the ball by hiring morons that couldn't predict the sunrise, let alone a financial statement, or they hired untrustworthy people that falsified the data.
At the very least, the CFO should have nixed the deal that lead to that $8.2 billion loss...
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
