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Trucking startup Convoy closes operations with no buyer

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Re: Trucking startup Convoy closes operations with no buyer

#571

Post by hef19898 »

revel wrote: post #412

There are some really profound misunderstandings of how bankruptcy and credit work in this thread. Creditors are ranked by seniority and get paid out in order by seniority. Equity is below every creditor and has been completely wiped out. Companies are not allowed to take cash or sell the furniture to pay out employees. That money is legally owed to creditors and attempting to stiff them is theft. I'm sorry to those…

They paid their carriers before being paid by their clients? That is pretty bad cash flow management, and risk management. And it is decidedely not what forwarders I know do. Forwarders, e.g. DHL freight, rarely own their trucks and subcontract that out, much like a broker does. And those subcontracted carriers are usually the last to get paid in that line.

Unless, of course, Convoy had to because all their carriers insisted on upfront payments for reasons. In which case Convoy was propably already screwed any way.

Re: Trucking startup Convoy closes operations with no buyer

#572

Post by zo1 »

FireBeyond wrote: post #378
dopamean wrote: post #151

Earlier quoted context omitted.

They were and the ceo commented on twitter that he had no idea why that was and then rescinded offers to people who were starting the next week.

The CEO who was the founder and until he came back as CEO was on the BOD, the executive, in fact. "No idea at all!"

I've worked at 1k employee-sized companies. The CEOs definitely know what's happening, who shits on who, who's hired/fired, what each project is going through at a glance, etc. So I would attribute this 100% to either lying, incompetence and/or "faking" by trying to emulate a Steve Jobs/CEO persona.

Re: Trucking startup Convoy closes operations with no buyer

#573

Post by zo1 »

bart_spoon wrote: post #98
fourseventy wrote: post #45

Earlier quoted context omitted.

The company is shutting down because they ran out of money... where do you think this magical severance pay is going to come from?

If things are so dire today that they have no money and must shutdown immediately, they were dead in the water 6-8 weeks ago anyways. The company isn’t going to be miraculously saved during that time, so just take the cash you used to pay your employees to rearrange chairs on the sinking ship, call it 2 months early, and pay out their severance/health care during that time while they look for new jobs.

Then they should have started easing off spending "6-8 weeks ago" if not sooner. Cancel contracts, stop dev projects, get rid of non essential personel, sell off unused assets, maybe even start laying off people, etc.

Re: Trucking startup Convoy closes operations with no buyer

#574

Post by twic »

HWR_14 wrote: post #496
revel wrote: post #412

There are some really profound misunderstandings of how bankruptcy and credit work in this thread. Creditors are ranked by seniority and get paid out in order by seniority. Equity is below every creditor and has been completely wiped out. Companies are not allowed to take cash or sell the furniture to pay out employees. That money is legally owed to creditors and attempting to stiff them is theft. I'm sorry to those…

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.

In case anyone is interested in the gory details, the priority order of creditors is here:

https://usbankruptcycode.org/chapter-5-creditors-the-debtor-...

Wages are fourth priority, but only up to $12,850 per person (one month's salary at ~150k a year).

The three priorities above wages are child support (not really applicable to corporate bankruptcy i assume), liquidator's expenses, and some mildly complex case i don't really understand. Taxes are eighth, two behind grain farmers and fishermen (lol America).

Re: Trucking startup Convoy closes operations with no buyer

#575

Post by AaronM »

shiroiuma wrote: post #544
hinkley wrote: post #466

Earlier quoted context omitted.

You will rudely discover that the landlord gets paid their early termination fees and any back rent before the employees see a single cent. Unfortunately I had to learn this the hard way (as in I was lied to and assumed they were still going to pay us, and then the payroll money went poof)

That sounds like bullshit (i.e., it shouldn't be this way, I'm sure you're correct). Being a landlord should entail a certain amount of risk: you're betting the tenant will be able to pay the rent, so you need to be careful choosing tenants, especially if they're companies, and moreso if they're companies with risky finances. Why should employees be prioritized below a property speculator?

Because much like the house in the casino, the capital class always wins.

Re: Trucking startup Convoy closes operations with no buyer

#576

Post by mixdup »

MaxHoppersGhost wrote: post #402
cheriot wrote: post #352

Earlier quoted context omitted.

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.

under $200k isn't a massive amount of money especially if you have a couple of kids and live in a high cost of living area. You definitely shouldn't be paycheck to paycheck but it would definitely be in the realm of "oh shit" if you lost it and your health insurance (again, especially if you had kids) overnight

versus a CEO who may be making double or triple that, and knew the end might be coming and started saving up extra

Re: Trucking startup Convoy closes operations with no buyer

#577

Post by anticensor »

dragonwriter wrote: post #272
andlarry wrote: post #249

Earlier quoted context omitted.

We do not have universal single-payer but we have a few very large government-run single-payer systems. If you have an example of a country with a single program that has more effective outcomes for a population of similar makeup and size, that would be a useful comparison.

A significant administrative cost benefit to single payer is not having to identify the correct payer, do coordination of benefits, etc. With multiple “single-payer” systems in the same population (often serving overlapping populations with each other and private health insurance) you've negated that benefit. You’ve also negated the market power advantage of monopsony purchasing by having multiple of them, and again…

> With multiple “single-payer” systems in the same population (often serving overlapping populations with each other and private health insurance) you've negated that benefit.

Turkey's system used to have that exact flaw (three single-payers, to be precise) until 2008. All merged thereafter.

Re: Trucking startup Convoy closes operations with no buyer

#579

Post by pc86 »

shiroiuma wrote: post #544
hinkley wrote: post #466

Earlier quoted context omitted.

You will rudely discover that the landlord gets paid their early termination fees and any back rent before the employees see a single cent. Unfortunately I had to learn this the hard way (as in I was lied to and assumed they were still going to pay us, and then the payroll money went poof)

That sounds like bullshit (i.e., it shouldn't be this way, I'm sure you're correct). Being a landlord should entail a certain amount of risk: you're betting the tenant will be able to pay the rent, so you need to be careful choosing tenants, especially if they're companies, and moreso if they're companies with risky finances. Why should employees be prioritized below a property speculator?

There are plenty of people who get paid out before the landlord, especially when you're several months in arrears as you almost always are in this situation. It's why in other markets landlords will be pretty quick to evict non-paying commercial tenants, there's a lot of risk and minimal personal guarantees unless it's a brand new business.

Re: Trucking startup Convoy closes operations with no buyer

#580

Post by PawgerZ »

paulddraper wrote: post #560
shiroiuma wrote: post #545

Earlier quoted context omitted.

Maybe they need something in bankruptcy law that requires the executives to stick around, at low pay, to do their jobs and unwind the company. After all, they're the ones who made it fail. Why should they be allowed to walk away? If a regular individual declares bankruptcy and then doesn't bother doing any of the required paperwork and legal stuff, saying the court needs to pay them top dollar for their time, things…

> Why should they be allowed to walk away? Because we decided ages ago that compelled labor is a bad idea.

Sorry to be pedantic, but according to the 13th ammendment, compelled labor is allowed as a punishment of crime.

To be real, if the executives at a company do commit crimes that lead to the failure of the company, I think they should be on the hook for that.

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