[See: Garnishment actions on wages and bank accounts, at: http://www.fair-debt-collection.com/searches/garnishment.html ]
[See: Attachment - Legal Definition, at: http://definitions.uslegal.com/a/attachment/].
[ See: Attachment - Legal Definition, at:
[See: Attachment, at: http://www.lectlaw.com/def/a086.htm ].
[See: Bankruptcy Preference, at: http://www.moranlaw.net/preferences.htm ].
[See: Michael Korybut, How Preferences Are Treated Under the New Bankruptcy Law, The Secured Lender (Jan/Feb 2007), at: http://findarticles.com/p/articles/mi_qa5352/is_200701/ai_n21281735/pg_5?tag=untagged ].
[See: Fraudulent Transfers (And How To Avoid Them), at: http://www.rpifs.com/protection/apfraud.htm ].
[ See: Fraudulent Transfers and Bankruptcy Considerations, at: http://www.assetprotectionbook.com/ch6.htm ].
Fury at $2.5bn bonus for Lehman's New York staff
By David Prosser
The Independent UK
Monday, 22 September 2008
Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.
The revelation sparked fury among the workers' former colleagues, Lehman's 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.
A spokesman for Barclays said the $2.5bn bonus pool in New York had been set aside before Lehman Brothers filed for chapter 11 bankruptcy in the United States a week ago. Barclays has agreed that the fund should continue to be ring-fenced now it has taken control of Lehman's US business, a deal agreed by American bankruptcy courts over the weekend.
[U.S. EXECUTIVE GREED AT EXPENSE OF AMERICAN AND OTHER TAXPAYERS!! LEHMAN EXECUTIVE BONUSES & GOLDEN PARACHUTES SHOULD NOT BE PROTECTED BY BANKRUPTCY FILING IN ANY COUNTRY - SHOULD BE CONTRIBUTED BY EXECUTIVES TO BAIL-OUT THE U.S. TAXPAYER and PAY SALARIED WORKERS WHO ARE OWED THEIR PAYCHECKS!!]
Barclays is paying $1.75bn for the US operation of Lehman and is keen to retain its best staff. It said it had made no promises to individual staff members about how much they will receive but that the bonus fund would be paid out. In addition to the $2.5bn cash pool, Barclays is also in negotiations with about 30 executives it considers to be Lehman's best assets and plans to offer them contracts worth tens of millions of dollars. British employees of Lehman described the bonus payments as a "scandal" as they waited anxiously yesterday to see whether a deal could be struck with buyers circling the bank's European operations.
Many of Lehman's UK staff are particularly angry about the US payouts because it has emerged that in the days running up to the bankruptcy, some $8bn in cash was transferred out of the account of the bank's European business into accounts at the New York head office.
There is no suggestion any of this cash was used to supplement the bonus fund, but partly as a result of the transfers, PricewaterhouseCoopers (PWC), the administrator to the European business, initially found it impossible to guarantee salaries would be paid. The September wages of thousands of European staff were only secured in the middle of last week, when PWC negotiated a £100m loan to fund the payments. PWC wrote to Lehman Brothers' head office in New York last week, requesting the repayment of the $8bn, but a spokesman said yesterday that the administrator had received no formal response.
The row will increase pressure on the Government to tackle perceptions that City pay is out of control. Speaking on The Andrew Marr Show on BBC1 yesterday, Gordon Brown said Britain would review financial services awards following the credit crisis. "There's been a great deal of irresponsibility," the Prime Minister said. "There's an element of the bonus system that is unacceptable."
[THIS IS THE FIRST THING UK MINISTER GORDON BROWN HAS SAID THAT WE AGREE WITH!!!]
However, Adair Turner, who formally takes over today as chairman of the Financial Services Authority, the UK's chief City regulator, warned it would be very difficult to police individual pay deals.
[NONSENSE - A COMPANY THAT IS BANKRUPT IS SUBJECT TO THE OVERSIGHT OF ITS CREDITORS, ESPECIALLY WHERE THE CREDITOR IS THE FEDERAL GOVERNMENT!]
"I think it would be really exceptional in any industry to have direct regulation on what different people are paid, I don't think that's appropriate and I don't think that would be workable," he said.
[IT IS APPROPRIATE FOR REGULATORS, IN A TIME OF CRISIS WHICH TRIGGERS A GOVERNMENT BAIL-OUT, TO OVERSEE AND REGULATE EXECUTIVE COMPENSATION IN EXCESS OF EARNED WAGES - THAT INCLUDES BONUSES, GOLDEN PARACHUTES, & STOCK OPTIONS, WARRANTS, ETC. (WORTHLESS HERE WITHOUT A GOVERNMENT BAIL-OUT!!]
"What is appropriate for regulators to do, is the need to ask searching questions about the nature of people's remuneration and to ask questions of institutions as to whether they are paying out bonuses before they are really sure whether the profits are really there."A spokesman for the TUC said the US payouts were unfair. "It looks like those that will suffer the most from the Lehman Brothers' collapse are those at the bottom of the corporate chain while many of those at the top will be looked after," he said.
Critics of the UK's attitude towards City pay also pointed out that the US has much stronger litigation laws. For example, advocates acting for Lehman creditors in the US said over the weekend that they might sue Richard Fuld, the investment bank's chief executive, who was paid $34.4m last year, in an attempt to force him to return some of the money.
[THE DEMOCRATS, NOT THE REPUBLICANS, HAVE IT RIGHT ON THIS ONE!! BUT THEY SHOULD ONLY FOCUS ON EXECUTIVE BONUSES & GOLDEN PARACHUTES TO PRESERVE THE RESPECT AND POCKETBOOK OF THE AMERICAN TAXPAYER - KEEP OUT FOR NOW ALL OTHER LESSER DEMANDS.]
Dems Try To Shape Bailout: Seek Pay Limits For Execs, Oversight, Homeowner Aid
By LORI MONTGOMERY And DAVID CHO
September 22, 2008
WASHINGTON — - Congressional Democrats considering the Bush administration's emergency plan to shore up the U.S. financial system on Sunday countered with their own demands for limits on executive pay for firms getting bailed out, stricter oversight of the program and provisions for struggling homeowners.
Democratic leaders have broadly embraced the administration's proposal to spend up to $700 billion to take troubled assets off the books of faltering firms and are not questioning the need to give the Treasury Department expansive authority to halt the meltdown in world markets. But by attempting to limit executive pay, they risk alienating key Republicans who object to such restrictions and delaying passage of the rescue plan, which in turn may stir renewed fear in the markets.
Sunday night, the Federal Reserve said the two remaining investment banks, Goldman Sachs and Morgan Stanley, now will be classified as regular commercial banks. That means that they will be subject to a broad and intensive set of government oversight rules that apply to regular banks. It also means that there are no remaining stand-alone investment banks.There were five investment banks at the beginning of the year, but Bear Stearns was bought by commercial bank J.P. Morgan in the spring, Lehman Brothers has gone bankrupt, Merrill Lynch is being acquired by Bank of America, and now Goldman Sachs and Morgan Stanley are becoming commercial banks.
Treasury Secretary Henry Paulson was working Sunday night to press House leaders to strike an agreement on the bailout bill by early this morning, according to sources. No deal with the Senate appeared close Sunday night.
Sources familiar with Treasury's thinking said Sunday night that the department is also continuing to monitor troubled financial firms and may have to intervene in the markets again this week, before Congress acts on the bailout, to address specific flash points.
Democrats sought to add oversight provisions and taxpayer protections to the proposal, which amounts to the largest government intervention in the private markets since the Great Depression. "We will not simply hand over a $700 billion blank check to Wall Street," House Speaker Nancy Pelosi, D-Calif., said in a statement.
Under the proposal drafted by House Democrats, the Treasury would be required to force faltering firms that want to sell their troubled assets to the government to "meet appropriate standards for executive compensation." Those standards would include a ban on incentives that encourage chief executives to take "inappropriate or excessive" risks, a mechanism to rescind bonuses paid for earnings that never materialize and limits on severance pay.
The Democratic measure also would require the Treasury to use its status as the new owner of billions of dollars in mortgage-backed assets to reduce foreclosures by forcing banks to rewrite loans for distressed homeowners and to forgive a portion of their debt. And it calls for a strict regimen of oversight, including independent audits and regular reports to Congress.
The proposal was presented to Treasury officials during marathon negotiating sessions this weekend over the bailout plan. House Republicans sent Treasury a separate set of demands, including the suggestion that a joint committee of Congress be created to oversee the program.
And Senate Democrats Sunday were still assembling a list of provisions they hope to add, including new powers for bankruptcy judges to modify mortgages on primary residences, an idea House Democrats said Sunday that they had abandoned.
[THIS IS NOT THE APPROPRIATE TIME FOR A LAUNDRY LIST TO ADDRESS THE WISH LIST OF POLITICIANS. ACTUALLY, HISTORY REFLECTS THAT, the Glass-Steagall Act of 1933 was not adopted to protect consumers, although one of its most celebrated provisions was the establishment of the Federal Deposit Insurance Corporation, which guarantees bank deposits of up to $100,000. The law was enacted during the first 100 days of the Roosevelt administration to rescue a banking system which had collapsed, wiping out the life savings of millions of working people, and threatening to bring the profit system to a complete standstill.
[IF THE PRIMARY PURPOSE OF THE PROPOSED (and now debated) RESTRUCTURING / BAILOUT LEGISLATION IS TO RESTORE THE TRANSPARENCY, INTEGRITY AND STRENGTH OF THE U.S. FINANCIAL SYSTEM BY, AMONG OTHER THINGS, ENSURING MARKET LIQUIDITY, THEN THE KEY EXECUTIVES, PARTNERS & PRINCIPALS OF THESE 'SAVED' WALL STREET FIRMS MUST SACRIFICE THEIR PROMISED BONUSES, EQUITY-KICKERS/INCENTIVES & GOLDEN PARACHUTES. THIS IS ESSENTIAL TO PRESERVE MARKET LIQUIDITY AND THE FINANCIAL SYSTEM AT LARGE. FURTHERMORE, THE U.S. GOVERNMENT MUST ENSURE AGAINST THE 'OFFSHORING' OF SUCH COMPENSATION MONIES TO NON-U.S. SECRET BANK ACCOUNTS NOT SUBJECT TO U.S./ INTERNATIONAL TRANSPARENCY RULES.].
Though lawmakers had promised to work across party lines and between chambers to speed the rescue plan to passage by Friday, that process was not working smoothly.
[DEMOCRATS SHOULD NOT GRANDSTAND AT EXPENSE OF AMERICAN TAXPAYER. ONLY DEAL WITH THE ESSENTIALS SUCH AS ENSURE THE GARNISHMENT OF EXECUTIVE BONUSES & GOLDEN PARACHUTES!!]
Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, said it's still possible to meet the deadline. But "this is of such import, if it takes a little longer to get right, then so be it," Dodd said. "I'm all for moving as quickly as we can, but I'm far more interested in getting it right."
On the Sunday morning television talk shows, Paulson said he has asked his counterparts in other nations to consider establishing similar programs.
On Sunday, British Prime Minister Gordon Brown said he would travel to New York on Wednesday to discuss what he called the "first crisis of the global economy." Brown said a "global regulatory system" should be established to govern a world where national borders often have little meaning. He added that Britain "was paying a price" for problems that started in the United States.
[GORDON BROWN, THE SOCIALIST, OF COURSE, WOULD PREFER A GLOBAL REGULATORY SYSTEM CENTERED IN THE UNITED NATIONS THAT IS MODELED AFTER CONTINENTAL EUROPE'S FINANCIAL SYSTEM.]
Though lawmakers on Capitol Hill were not working in unison, they were voicing similar concerns Sunday about whether the bailout plan includes enough oversight and protections for taxpayers.
The administration's proposal would give the Treasury secretary sweeping authority to purchase assets from any financial institution, whether headquartered in the United States or abroad, over the next two years. It would place no limit on when the assets could be sold. And it would allow the Treasury secretary to spend up to $700 billion without oversight or review by other federal agencies or the courts.
"It's the biggest amount of money with the least amount of detail I think I've ever seen in my life," said Douglas Elmendorf, a Brookings Institution economist who has worked in the Treasury Department and at the Federal Reserve. "The secretary does whatever he wants and spends whatever he wants."
Lawmakers across the spectrum are demanding more oversight of the bailout. House Democrats have the most specific proposal, which would order the Government Accountability Office to establish a permanent outpost within the Treasury to monitor the bailout program. That office would have unfettered access to the activities and financial documents of the rescue program, and would be required to submit reports to Congress every 60 days.
Many lawmakers also want additional protections for taxpayers. House Republicans, for example, have asked that any profits generated by the sale of the bad assets be used to reduce the budget deficit and not for any other purpose.
Where the parties appear to diverge is over Democrats' demand for government authority over the paychecks of executives whose companies participate in a taxpayer bailout. House Republicans opposed the idea, aides said, and Sen. Richard C. Shelby, R-Ala., a key figure in the debate, said Sunday on CBS's "Face the Nation" that he thinks compensation should be set by corporate boards.
[SENATOR SHELBY IS OUT OF ORDER, OUT OF TOUCH WITH THE AMERICAN PEOPLE AND IN BED WITH WALL STREET EXECUTIVES, IF HE AVOIDS HOLDING THEM ACCOUNTABLE!!].
Speaking on the same program, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said voters would protest a program that appears to permit corporate executives to pocket taxpayer dollars."It would be a grave mistake to say that we're going to buy up the bad debt that results from the bad decisions of these people, and then allow them to get millions of dollars on the way out the door," Frank said. "The American people don't want that to happen."
[WHILE WE DISAGREE WITH REPRESENTATIVE BARNEY FRANK ON MANY ISSUES, HE IS RIGHT ABOUT THIS ONE. AMERICAN TAXPAYERS MUST BE PROTECTED AGAINST THE GREED AND LARGESSE OF WALL STREET EXECUTIVES AT THIS MOST CRITICIAL TIME!!]