511–520 of 639 posts
Earlier quoted context omitted.
Courts can pierce the corporate veil for failure to pay employees.
Source? normally piercing the corporate veil requires serious executive misconduct.
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While in general what you are saying is true, employees owed wages are the highest seniority of creditor. As long as you were selling furniture for reasonable prices to make payroll, you should be fine.
Is the complaint that they are not paying remaining wages or that they are not paying severance?
But yes this grandparent post is mostly correct. If severance was not built in to any loan contact (it never is). Then creditors are paid first.
It would be interesting to know how much debt they have vs remaining cash and when did it dip below.
Paying severance is extremely low probably even below equity since there's no legal requirement to pay severance.
Earlier quoted context omitted.
Source? normally piercing the corporate veil requires serious executive misconduct.
IANAL, but my understanding is in agreement with the GP - failing to pay wages is de facto 'serious executive misconduct'. a probably relevant article: https://www.severino-law.com/blog/oqz4dx2ivdnzt7aqqrvbk9et11...
Going through a perfectly legal bankruptcy procedure is very different than working your severs 72 hours a week for years without overtime then refusing to show up at court.
This comports with my understanding that piercing the veil usually requires illegal behavior.
I work for one of their competitors and I can empathize with them. My thoughts goes to all the employees and their families. The Freight business is collapsing after an unrealistic high during the pandemic. Since April 2022, revenue per load has decreased to about 70%, this means less ways to generate a profit under the same headcount. We also saw a decrease in volume as companies overstocked and consumer spending ha…
I think Flock Freight will be the next shutdown. Rough industry.
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Severance IS wage
Errrr how? [Edit] Legally how is it. Not just because it's commonly measured in months of wages
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I LOL'd. Let's also remember that every tech company has middle and low wage jobs as well.
What would those be though? I work at a U.S.-based software startup with 100 employees and no one makes less than $80K. Avg cash comp is just under $200k. It’s likely Convoy had a very similar profile.
Earlier quoted context omitted.
Severance IS wage
Errrr how? [Edit] Legally how is it. Not just because it's commonly measured in months of wages
They look really similar, but legally entirely different.
In "gardening leave" you're still an employee and on payroll until the last day. Whereas severance you're not an employee and typically paid lump-sum (but doesn't matter for this discussion). So in this specific situation, yes, that would be wages and would be paid out first before creditors because you are _legally_ entitled to those wages.
The problem of course you cannot hope to put a whole company on "gardening leave" in hopes that it can "act as severance" for everyone. Your creditors will sue you and easily win. They'd probably put an emergency injunction on the company and remaining funds before the first month was even completed once they learned of "creditors hate this one little trick!"
Earlier quoted context omitted.
Errrr how? [Edit] Legally how is it. Not just because it's commonly measured in months of wages
It's not the way it is calculated. All payments attached to employment contract are wages, be it regular salary, bonuses, vacation pay or severance. Say the contract defines severance of 1 month for each full year worked capped at 3 months: at the moment contract reaches 1 year anniversary, the employee should be owed 1 month worth of severance upon contract termination
Way more commonly, severance is part of a termination contract, and thus it would not be here.