Let's do the math.
Assume the judge says that x% of all sale proceeds go to investors, and (100-x)% go to employee benefits.
If we assume the sale proceeds will be greater with the existing executives by more than their bonus, then the employee benefits will be greater having paid the bonuses than they would if they used the bonuses to pay off the investors and employees.
If we assume the sale proceeds won't change without the executives, then the company should ditch the execs and use that bonus money to pay their investors and employees.
So it still comes down to the company convincing the bankruptcy judge that the sales will be more profitable, by at least the amount of the bonuses, with the executives than without.
The judge will NOT favor the employees over other creditors and investors - they are merely another group of creditors for the bankruptcy proceeding, and under no circumstances could they get rid of the executives and shuttle all of the bonus money toward just one of the company's creditors/investors.
Keep in mind that a lot of the creditors are other companies who are also supporting their employees, and a lot of the investors are banks who have put other people's retirement savings into portfolios that contain hostess stock. You can't simply put the employees ahead of everyone else.
Assume the judge says that x% of all sale proceeds go to investors, and (100-x)% go to employee benefits.
If we assume the sale proceeds will be greater with the existing executives by more than their bonus, then the employee benefits will be greater having paid the bonuses than they would if they used the bonuses to pay off the investors and employees.
If we assume the sale proceeds won't change without the executives, then the company should ditch the execs and use that bonus money to pay their investors and employees.
So it still comes down to the company convincing the bankruptcy judge that the sales will be more profitable, by at least the amount of the bonuses, with the executives than without.
The judge will NOT favor the employees over other creditors and investors - they are merely another group of creditors for the bankruptcy proceeding, and under no circumstances could they get rid of the executives and shuttle all of the bonus money toward just one of the company's creditors/investors.
Keep in mind that a lot of the creditors are other companies who are also supporting their employees, and a lot of the investors are banks who have put other people's retirement savings into portfolios that contain hostess stock. You can't simply put the employees ahead of everyone else.
