Published on March 18, 2009 | by LawNews
Prof. Daniel Greenwood on The Huffington Post
How to recoup the AIG bonuses – Let them eat cake
By Daniel JH Greenwood
The Huffington Post
March 18, 1009
Let’s get real. This may be a nation of laws, but contracts are not sacred, and employment contracts are less sacred than any. When Enron’s executives destroyed the company, Enron’s secretaries lost their pensions. When General Motors’ executives failed to plan for the possibility that oil prices might go up or pollution controls might get serious and ran the company into the ground, everyone agreed that its retirees, who fulfilled their end of the bargain years ago, must accept that they aren’t going to get what their contract says. Every company that goes into bankruptcy — and AIG would have been bankrupt several times over were it not for Federal subsidies — rewrites employment contracts. Indeed, as airline and steel company employees know all too well, sometimes that is the main reason the company goes to the bankruptcy court in the first place.