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View Diary: Hostess CEO Received 300% Raise Before Bankruptcy (86 comments)

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  •  Isn't it a felony to plan a bankruptcy? (6+ / 0-)

    That is, to take money out of a firm when you know it's insolvent?

    For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

    by Anne Elk on Sat Nov 17, 2012 at 07:52:35 PM PST

    •  If it is, then it sure (3+ / 0-)
      Recommended by:
      Reepicheep, Amber6541, OleHippieChick

      isn't deterring anyone--and no one ever seems to be held accountable.

      The banks have a stranglehold on the political process. Mike Whitney

      by dfarrah on Sat Nov 17, 2012 at 08:09:07 PM PST

      [ Parent ]

    •  Not necessarily a crime... (5+ / 0-)

      ....but a bankruptcy trustee can sue to get the money back for creditors if they believe assets were transferred to keep them out of the hands of creditors (which would include the pension fund and any employees who got stiffed).

      9-11 changed everything? Well, Katrina changed it back.

      by varro on Sat Nov 17, 2012 at 08:20:21 PM PST

      [ Parent ]

    •  It's a felony to plan a bankruptcy to cover up (5+ / 0-)

      fraud, and it's a felony to convey assets with the intent to defraud creditors.

      Filing false bankruptcy court documents is perjury at a minimum.

      Bankruptcy fraud is a federal crime in the United States.

      The bankruptcy court is supposed to rule on these matters. There is a U.S. Trustee from the DOJ who is also supposed to get involved

      But in the case I cited above (Syntax-Brillian Corporation) the Trustee did nothing. It wasn't until later that individual investors uncovered the Chinese reverse merger scam/fraud that the SEC got involved and charged some of the perpetrators. The shady law firm that arranged the bankruptcy agreed to pay back millions in fees to the creditors trust (a slap on the wrist for them, really, since the bankruptcy filing was covering up actual fraud)

      This case may be different but the vulture investors and their henchmen are well versed in all the loopholes. They know how to get meat off the carcass, let's say.

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