I posted this on the Motley Fool board as well.
http://www.wnymedia.net/index.php?option=com_content&task=view&id=506&Itemid=35
<<<At the same time corporate executives are paid retirement dollars for years they never worked, hapless employees lose supplemental retirement benefits for a lifetime of actual work. Just ask Betty Moss. She was one of thousands of workers at Polaroid Corp.--the Waltham, Mass., maker of instant cameras and film--who, beginning in 1988, gave up 8% of their salary to underwrite an employee stock-ownership plan, or ESOP. It was created to thwart a corporate takeover and "to provide a retirement benefit" to Polaroid employees to supplement their pension, the company pledged. Alas, it was not to be. Polaroid was slow to react to the digital revolution and began to lose money in the 1990s. From 1995 to 1998, the company racked up $359 million in losses. As its balance sheet deteriorated, so did the value of its stock, including shares in the ESOP. In October 2001, Polaroid sought bankruptcy protection from creditors.
By then, Polaroid's shares were virtually worthless, having plummeted from $60 in 1997 to less than the price of a Coke in October 2001. During that period, employees were forbidden to unload their stock, based on laws approved by Congress. But what employees weren't allowed to do at a higher price, the company-appointed trustee could do at the lowest possible price--without even seeking the workers' permission. Rather than wait for a possible return to profitability through restructuring, the trustee decided that it was "in the best interests" of the employees to sell the ESOP shares. They went for 9¢. In short order, a $300 million retirement nest egg put away by 6,000 Polaroid employees was wiped out. Many lost between $100,000 and $200,000.">>>
...
<<<Once Polaroid entered bankruptcy, Moss and her retired co-workers learned a bitter lesson--that they had no say in the security of benefits they had worked all their lives to accumulate. While the federal Pension Benefit Guaranty Corp. (PBGC) agreed to make good on most of their basic pensions, the rest of their benefits--notably the ESOP accounts, along with retirement health care and severance packages--were canceled. The retirees, generally well educated and financially savvy, organized to try to win back some of what they had lost by petitioning bankruptcy court, which would decide how to divide the company's assets among creditors. To no avail: Polaroid's management had already undercut the employees' effort. Rather than file for bankruptcy in Boston, near the corporate offices, the company took its petition to Wilmington, Del., and a bankruptcy court that had developed a reputation for favoring corporate managers. There, Polaroid's management contended that the company was in terrible financial shape and that the only option was to sell rather than reorganize. The retirees claimed that Polaroid executives were undervaluing the business so the company could ignore its obligations to retirees and sell out to private investors.
The bankruptcy judge ruled in favor of the company. In 2002 Polaroid was sold to One Equity Partners, an investment firm with a special interest in financially distressed businesses. (One Equity was a unit of Bank One Corp., now part of JPMorgan Chase.) Many retirees believed the purchase price of $255 million was only a fraction of the old Polaroid's value. Evidence supporting that view: the new owners financed their purchase, in part, with $138 million of Polaroid's own cash.>>>
Read on to see how the CEO's fared. This is legal
?? I don't know if the upper layers are becoming more corrupt or if I am just now catching on to it.
-helen
http://www.wnymedia.net/index.php?option=com_content&task=view&id=506&Itemid=35
<<<At the same time corporate executives are paid retirement dollars for years they never worked, hapless employees lose supplemental retirement benefits for a lifetime of actual work. Just ask Betty Moss. She was one of thousands of workers at Polaroid Corp.--the Waltham, Mass., maker of instant cameras and film--who, beginning in 1988, gave up 8% of their salary to underwrite an employee stock-ownership plan, or ESOP. It was created to thwart a corporate takeover and "to provide a retirement benefit" to Polaroid employees to supplement their pension, the company pledged. Alas, it was not to be. Polaroid was slow to react to the digital revolution and began to lose money in the 1990s. From 1995 to 1998, the company racked up $359 million in losses. As its balance sheet deteriorated, so did the value of its stock, including shares in the ESOP. In October 2001, Polaroid sought bankruptcy protection from creditors.
By then, Polaroid's shares were virtually worthless, having plummeted from $60 in 1997 to less than the price of a Coke in October 2001. During that period, employees were forbidden to unload their stock, based on laws approved by Congress. But what employees weren't allowed to do at a higher price, the company-appointed trustee could do at the lowest possible price--without even seeking the workers' permission. Rather than wait for a possible return to profitability through restructuring, the trustee decided that it was "in the best interests" of the employees to sell the ESOP shares. They went for 9¢. In short order, a $300 million retirement nest egg put away by 6,000 Polaroid employees was wiped out. Many lost between $100,000 and $200,000.">>>
...
<<<Once Polaroid entered bankruptcy, Moss and her retired co-workers learned a bitter lesson--that they had no say in the security of benefits they had worked all their lives to accumulate. While the federal Pension Benefit Guaranty Corp. (PBGC) agreed to make good on most of their basic pensions, the rest of their benefits--notably the ESOP accounts, along with retirement health care and severance packages--were canceled. The retirees, generally well educated and financially savvy, organized to try to win back some of what they had lost by petitioning bankruptcy court, which would decide how to divide the company's assets among creditors. To no avail: Polaroid's management had already undercut the employees' effort. Rather than file for bankruptcy in Boston, near the corporate offices, the company took its petition to Wilmington, Del., and a bankruptcy court that had developed a reputation for favoring corporate managers. There, Polaroid's management contended that the company was in terrible financial shape and that the only option was to sell rather than reorganize. The retirees claimed that Polaroid executives were undervaluing the business so the company could ignore its obligations to retirees and sell out to private investors.
The bankruptcy judge ruled in favor of the company. In 2002 Polaroid was sold to One Equity Partners, an investment firm with a special interest in financially distressed businesses. (One Equity was a unit of Bank One Corp., now part of JPMorgan Chase.) Many retirees believed the purchase price of $255 million was only a fraction of the old Polaroid's value. Evidence supporting that view: the new owners financed their purchase, in part, with $138 million of Polaroid's own cash.>>>
Read on to see how the CEO's fared. This is legal
?? I don't know if the upper layers are becoming more corrupt or if I am just now catching on to it.-helen
