Large fees are paid to accountants, lawyers and consultants to handle the restructuring of bankrupt companies. They have to be borne by the shareholders who already lost so much value in their investments. Read this report.
My comment
This is clearly excessive, but nobody seems to care. We are in a world of greed and immorality.
Morally, I agree with your observation on morality and greed.
ReplyDeleteEver wonder why many parents want their children to be investment bankers,accountants,lawyers and consultants.
These players are helping what economists called the "velocity" of money.
I know someone who used to be in investment banking, who jumped ship from the industry in late 2007 when he saw clearly the unravelling of the mortgage derivatives trade.
ReplyDeleteIronically, he jumped into the company Alvarez & Marsal, the restructuring firm in charge of liquidating Lehman Brothers.
As investment banker, this guy used to earn S$2 million during the good years. In the turnaround / restructuring industry his pay is lower around S$1 million, but the work not so pressurising and requires less brain power, just more politicking needed.
And yes, when you talk to him, the sense of entitlement to high pay, big bonuses, company-paid condo in CBD-area, business-class travel, suites in 5-star hotels with full room service, exclusive club memberships etc are all there.
Someone told me that the board of these companies that are being restructured comprise of people who sit on other boards and may benefit from the large fees payable to the other parties. They belong to a "club" and may get large fees in return in other ways. The large fees circulate among a small circle of club members. Wow! What an immoral world!
ReplyDeleteAnd the poor investor got the second slap on his face by these restructuring companies.
ReplyDeleteAnd the regulator pat its back for helping him to ecover some of the money back.
All snakes and rats working in cahoots. There is such a thing called retribution in this world,only the time has not arrived yet. Else we could throw all religions down the rubbish chute.
True, had to agree, sometimes is rather who you know than what you know.
ReplyDeleteHad an example of Washington Mutual Case that happen sometimes in 2008, new CEO appointed and get $13 mil for just 18 days of work? How is this to be justified? CEO has no idea that companies are going to go bankrupt?
Link of the WaMu report as per below:
http://www.reuters.com/article/idUSTRE48P8LG20080926