> it'd be hard for a trustee to argue that making severance payments to rank and file employees is not something "made in the ordinary course of business"
Typically in exchange for value and in Chapter 11, where you’re trying to preserve asset values.
> can't find any cases where unsecured creditors have successfully injuncted a bankrupt company from making severance payments
Senior unsecured. Higher priority than employee claims.
> mediators who were handling part of the bankruptcy proceedings
Mediation is voluntary. In the Toys ‘r’ Us bankruptcy, the original equity was wiped and creditors took over. They may have owned both debt and equity. But they were acting qua former creditors.
I’m not going to argue who would win. What I will say is the creditors would sue. There would be months of litigation, not a smooth transition to handing the firm’s last cash to employees. (Different picture had they never issued debt.)
Typically in exchange for value and in Chapter 11, where you’re trying to preserve asset values.
> can't find any cases where unsecured creditors have successfully injuncted a bankrupt company from making severance payments
Senior unsecured. Higher priority than employee claims.
> mediators who were handling part of the bankruptcy proceedings
Mediation is voluntary. In the Toys ‘r’ Us bankruptcy, the original equity was wiped and creditors took over. They may have owned both debt and equity. But they were acting qua former creditors.
I’m not going to argue who would win. What I will say is the creditors would sue. There would be months of litigation, not a smooth transition to handing the firm’s last cash to employees. (Different picture had they never issued debt.)