RSSLehman Goes Bankrupt As Bonuses Abound!
J.J. Jackson* | September 24, 2008
Lehman Brothers is going bankrupt and for a job well done (sarcasm intended) employees will be getting $2.5 billion dollars in bonuses. Hmm … $2.5 billion for driving a company into bankruptcy? How do I get in on that business plan!
Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.
The revelation sparked fury among the workers’ former colleagues, Lehman’s 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.
A spokesman for Barclays said the $2.5bn bonus pool in New York had been set aside before Lehman Brothers filed for chapter 11 bankruptcy in the United States a week ago. Barclays has agreed that the fund should continue to be ring-fenced now it has taken control of Lehman’s US business, a deal agreed by American bankruptcy courts over the weekend.
Oh, so because it was set aside BEFORE the bankruptcy it is ok? Uh uh. Someone is violating the laws of economics here! That entire $2.5 billion should be seized by the courts presiding over the bankruptcy and used to pay of creditors and debts of the company that is supposedly “bankrupt”.
That’s not “socialism” either. That’s called paying your debts before spending money you claim not to have. Sorry. You are either bankrupt or you are not. And with $2.5 billion floating around you are not bankrupt!
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