Trucking startup Convoy closes operations with no buyer • Hacker News Board

Re: Trucking startup Convoy closes operations with no buyer

#611

Post by s1artibartfast » Fri, Oct 20, 2023, 8:18 PM UTC

thereisnospork wrote: post #607

s1artibartfast wrote: post #582

Earlier quoted context omitted.

I understand what you said, I just don't think it is true and none of the provided sources say so. Meanwhile, everything I have read says they are simply priority creditors up to a limit. Beyond the limit, judges will pay other creditors before employees. >Because claims for unpaid wages due to insolvency do not fall under the Fair Labor Standards Act (FLSA) unless the employer willfully failed to pay wages owed and…

>I understand what you said, You really don't seem to. The allowed recourse, under contention, for unpaid wages due to bankruptcy isn't via the FLSA, its a lawsuit against the company's owners. If you run a taco stand, don't pay your employee, and then declare bankrupcy - validly or not - you will plausibly be held liable, as person, not an LLC, in civil court for those wages. To be paid from your personal assets and…

yes, and I am talking about the case of wages during/post bankruptcy.

I am not talking about the case of of declaring bankruptcy to avoid paying wages.

Re: Trucking startup Convoy closes operations with no buyer

#612

Post by Retric » Fri, Oct 20, 2023, 9:25 PM UTC

paulddraper wrote: post #602

pseg134 wrote: post #565

Earlier quoted context omitted.

How would it possible help in this situation? The game is over and everyone knows exactly where all the money is. It will just be distributed back to the creditors and then remaining to the shareholders. Who needs the CFO for that? Basically anyone could run that process.

> everyone knows exactly where all the money is Bank accounts, contacts, loans, real estate, equipment, IP, etc. For a (once) multi-billion 1500-employee logistics business, it's more involved than you give credit for.

The CEO/CFO isn’t going to know all the nitty gritty details. Retaining them is about solving different problems than what specific asset is where.

Re: Trucking startup Convoy closes operations with no buyer

#613

Post by Fordec » Fri, Oct 20, 2023, 10:23 PM UTC

asdff wrote: post #535

Fordec wrote: post #201

Earlier quoted context omitted.

And yet, statistically, the vast majority will be healthy. And the ones with chronic issues should know where they need to be on how to manage it. It's down to you if how you want to live your life. Plenty of tech companies that aren't startups. Plenty of countries that pay less and have higher taxes that have the safety net. Pick your lifestyle and live with your decision. I did, took the risks, it didn't pay off, b…

I don't think you understand how much money is in the bananastand here in the US. Even with a european tier safety net, its not like a huge tradeoff will be made. You could easily pay people the same and give them solid benefits to boot with just a little bit more taxation at the top end of the economy. People act like taxing rich people will scare them off, yet there are probably more rich people in California than…

So move to Europe then. Enjoy your $75k/yr salary with 42% income tax. Other fomments in this thread are using $150k as a baseline salary of reasonable expectation. It's not a big deal to you after all. I on the other hand emigrated from Europe already and don't plan on returning. I make more here now per year than I did cumulatively in my first 7 years of work combined and finally have hope of not living with my mother for the rest of my life and can afford housing. And this is the "it didn't work out" timeline.

Re: Trucking startup Convoy closes operations with no buyer

#614

Post by jessriedel » Fri, Oct 20, 2023, 10:42 PM UTC

s1artibartfast wrote: post #609

jessriedel wrote: post #586

Earlier quoted context omitted.

This seems to establish precedent that unpaid wages by a bankrupt company, even in the absence of serious misconduct, are sufficient justification for veil piercing: > The case therefore would up presenting a clear question of law: Where the workers are employed by a corporation, can an individual be held liable for penalties associated with statutory violations in the payment of wages where there was no allegation o…

>The only ambiguity to me in reading this is whether the court considered it different because the wages went unpaid for a while before bankruptcy. This is my entire point. If you go into chapter 7 bankruptcy, and a judge prioritizes senior creditors above unpaid wadges, you are clearly in different territory than if the corporation was neglecting wages before bankruptcy. Everyone keeps linking cases for pre-bankrupt…

> ...another industry faces the same problem: startups. The opportunity to create the next big thing has “long lured ambitious entrepreneurs into shiny co-working spaces and startup accelerators” in Silicon Valley, but the reality is that most startups fail.15 These failures can be crushing for all those involved.16 Not only does the death of a startup mean the loss of a job and the death of a dream, it also means a lack of funds to compensate employees for work they have already put in.17 Although the practice of withholding wages is illegal, it is a rather common problem when startup founders “put off paying employees as they wait out their next round of funding.”18 If the funding falls through, there is often no money left to pay employees the wages they have already earned.

> That is what happened to plaintiff Brett Voris (“Voris”) in Voris v. Lampert.

https://www.gmsr.com/wp-content/uploads/2021/07/Kuang-Too-Ma...

...which is the same case I linked above. So the whole issue is how long wages can be delayed. If you're arguing that "Convoy management is unlikely to be personally liable assuming they didn't delay any wage payments whatsoever and their wage payment intervals are found to be reasonable by the court", then I agree. But it's rather common for some of these conditions to not hold, so the potential for piercing the veil is very real.

(Perhaps you are arguing against other people who think that unpaid wages are always considered theft, in which case I would agree with you. I was respondsing to the comment "you cant prosecute a dead entity for theft"; often you can, and it depends on the details, which I presume are not yet public for Convoy.)

Re: Trucking startup Convoy closes operations with no buyer

#615

Post by Dylan16807 » Sat, Oct 21, 2023, 12:04 AM UTC

FireBeyond wrote: post #608

Dylan16807 wrote: post #599

Earlier quoted context omitted.

Embezzlement as in, you bet the money and if it succeeds you pocket the excess. Or that you already stole money and you're desperately gambling company money to make it back and hide the theft. This is not embezzlement. It's reckless, not theft. > Sounds both unsanctioned and sociopathic to me. Very unsanctioned, but I don't see how you get sociopathic from that quote. Please explain what's sociopathic about it like…

How is this not theft? He took company funds and gambled them. That he won and was able to replace them is immaterial. Martin Shkreli was convicted for misusing company funds even though he made his investors money. It's not "not theft" because you can or do put the money back. I can't understand how you can't see that. That $5,000 ($40,000 in today's money) might not have gone very far, but you are very eager to whi…

Okay, I don't want to argue about the exact semantics of the word theft and what kinds of "misuse of funds" it includes. Nothing went in his pocket; it wasn't embezzlement.

And Shkreli was moving money between companies and lying to investors, neither of which is relevant here.

More importantly, none of that explains what is sociopathic here.

> He easily could have lost that bet, and that money could have reimbursed credit card bills for his employees.

But would it have been used that way? Or would it have kept propping the company up for a bit longer until total collapse?

> How that isn't reckless and malfeasance, I don't understand. "We're screwed. I can use the last of this money to try to do something right, or fuck it, I'm going to Vegas!" isn't leadership.

I never said it wasn't reckless. But he got the business out of being screwed. If he failed, the business would have gone from screwed to... also screwed. What "do something right" do you have in mind that was so important it becomes sociopathic if he doesn't do it? And it has to be something that would have happened if he didn't gamble, but wouldn't have happened if he lost.

In other words, if your claim is right then there has to be a big human-impacting difference between the "he does nothing" outcome and the "he loses the gamble" outcome. And I'm not really seeing that difference. If both scenarios involve total shutdown and the only difference is a few days, that ain't it.

Re: Trucking startup Convoy closes operations with no buyer

#616

Post by pradn » Sat, Oct 21, 2023, 3:53 AM UTC

JALTU wrote: post #606

twic wrote: post #574

Earlier quoted context omitted.

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…

Fisherman, here. I have a few stories...

Please share, I’m interested!

Re: Trucking startup Convoy closes operations with no buyer

#617

Post by s1artibartfast » Sat, Oct 21, 2023, 4:43 AM UTC

jessriedel wrote: post #614

s1artibartfast wrote: post #609

Earlier quoted context omitted.

>The only ambiguity to me in reading this is whether the court considered it different because the wages went unpaid for a while before bankruptcy. This is my entire point. If you go into chapter 7 bankruptcy, and a judge prioritizes senior creditors above unpaid wadges, you are clearly in different territory than if the corporation was neglecting wages before bankruptcy. Everyone keeps linking cases for pre-bankrupt…

> ...another industry faces the same problem: startups. The opportunity to create the next big thing has “long lured ambitious entrepreneurs into shiny co-working spaces and startup accelerators” in Silicon Valley, but the reality is that most startups fail.15 These failures can be crushing for all those involved.16 Not only does the death of a startup mean the loss of a job and the death of a dream, it also means a…

> If you're arguing that "Convoy management is unlikely to be personally liable assuming they didn't delay any wage payments whatsoever and their wage payment intervals are found to be reasonable by the court", then I agree.

This is exactly what I am auguring. Convoy isnt even delaying any wage payments. They are not paying severance or providing transition healthcare/COBRA.

It seems like Voris v. Lampert case had a much longer delay, and the court still decided against the the plaintiff.

I did learn that there is more case law on piercing the vale for wage than I realized, but everything I read still suggests that a legitimate bankruptcy without serious/illegal executive misconduct will not lead to piercing of the veil.

Re: Trucking startup Convoy closes operations with no buyer

#618

Post by hamburglar » Sat, Oct 21, 2023, 5:03 AM UTC

thaumasiotes wrote: post #557

hamburglar wrote: post #551

Earlier quoted context omitted.

Paid noncompete periods are far from the only reason for gardening leave.

What are some examples that somebody might have heard of?

The usual one I hear about is someone who’s in generally in good standing and who has a significant stock award coming, but who just isn’t “working out” and management gives them the gift of finishing out their term to get the bonus

Re: Trucking startup Convoy closes operations with no buyer

#619

Post by bsder » Sat, Oct 21, 2023, 6:09 AM UTC

s1artibartfast wrote: post #492

LastTrain wrote: post #487

Earlier quoted context omitted.

Not paying employees for work already rendered is wage theft, which is actual theft.

you cant prosecute a dead entity for theft.

In California, I believe that wages are one of the very few things that executives can be held personally liable for.

Re: Trucking startup Convoy closes operations with no buyer

#620

Post by eru » Sat, Oct 21, 2023, 8:21 AM UTC

vidarh wrote: post #555

eru wrote: post #553

Earlier quoted context omitted.

> I also note that you claimed working hours as a normal good whose demand would rise with income [...] No, leisure is the normal good. And so is safe food and clean air etc. > Given we can look back at history and see direct causal links [...] How do 'see' direct causal links? Just because people work to achieve X, and then X happens, is not a direct causal link. Eg praying for winter to be over, doesn't mean that t…

> No, leisure is the normal good. And so is safe food and clean air etc. You got what I meant unless you're being obtuse. The point remains that the demand preceded the financial ability to bargain for it. It was independent of income. > How do 'see' direct causal links? By looking at when employers offered concessions in order to end strikes etc. Now you are being obtuse. Go back and look at newspaper archives from…

> When you describe workers as parasites, that is utterly vile and explains a lot. And so we are done here.

You are putting words in my mouth. I am talking about unions, not workers.