Bloated Pay For Execs Draws Ire In Chapter 11 Cases

Law360, New York (February 23, 2006, 12:00 AM EST) -- Bloated compensation packages for executives at the helm of bankrupt companies are increasingly drawing fire from creditors and workers, who question why executives should earn huge bonuses while employees are asked to sacrifice pay and benefits.

“It’s not a recent trend but compensation’s been increasing for a number of years,” says Gary Marsh, the chair of McKenna Long and Aldridge’s creditors’ rights and bankruptcy section. “And it’s not going down by any stretch of imagination.”

In 2005, a year dominated by a string of huge bankruptcies,...
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