[HN Gopher] Bankruptcy court gave blanket immunity to executives...
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Bankruptcy court gave blanket immunity to executives in 9 out of 10
major cases
Author : 23skidoo
Score : 206 points
Date : 2022-11-07 15:02 UTC (7 hours ago)
(HTM) web link (www.reuters.com)
(TXT) w3m dump (www.reuters.com)
| legitster wrote:
| >blanket immunity.
|
| From civil lawsuits. They can still be charged criminally.
| bawolff wrote:
| I feel like the article is being rather misleading in that
| regards. Like its talking about sexual assualt, at a glance it
| sounds like they are talking about the criminal act of the
| assualt itself, but they are actually talking about if the
| board of the company was negligent in preventing their employee
| from doing the crime (i think, the article is unclear on that)
| alixrjlkdjf wrote:
| pointless. Most of those things are not crimes (mismanagement,
| bankruptcy) unless you can start the civil case for damages
| first to find the fraud that then becomes criminal. It's a well
| thought of plan.
| legitster wrote:
| > unless you can start the civil case for damages first to
| find the fraud that then becomes criminal
|
| Someone can correct me if I am wrong, but when you go to
| bankruptcy court, you actually have to reveal all of your
| finances and justify why you need to declare bankruptcy? You
| can't just preliminarily declare bankruptcy in anticipation
| of damages - you actually have to damages assigned by a
| court.
|
| And it seems like a huge waste of everyone's time in the
| bankruptcy process if the judge says "oh yeah - anyone can
| now tack on a lawsuit and I'll see you back here every single
| time".
| [deleted]
| slavboj wrote:
| The entire point of bankruptcy proceedings is to arrange a final
| resolution of outstanding claims when there aren't enough assets
| to cover them. Someone is going to get screwed, because the money
| simply isn't there, including the money that would be used to pay
| for ongoing D&O (directors & officers) insurance that would pay
| civil claims against directors for actions taken in the course of
| their employment.
| bradleyjg wrote:
| The directors and officers are often quite wealthy. Insurance
| isn't a cap on liability.
| raincom wrote:
| Collusion among judges, lawyers, and prosecutors helps explain
| this phenomenon. This collusion occurs due to "revolving door".
| None of these parties (judges, lawyers and prosecutors) receive
| any bribes--so it is legal. However, the system is set up in a
| collusive way: lawyers for defendants become judges; prosecutors
| become a big law partner, representing defendants; etc.
| AcerbicZero wrote:
| This is likely a big part of it; take a trip to any traffic
| court in a medium sized town early in the day and you're almost
| certain to see some exceptionally chummy lawyers and judges
| hanging out.
| bawolff wrote:
| Kind of wish the article would go into more details about the
| immunity agreements in question. Its hard to make a judgement on
| if these cases are inappropriate without knowing the details.
|
| Some of the stuff in the article strike me as totally fine
| though. Like complaining that a legal settlement has too much
| legalese in it. Like, really?
| JumpCrisscross wrote:
| Judge "Walrath argued that the majority of women who supported
| the deal might receive nothing in a settlement if she denied the
| legal shields because insurers refused to pay without them and
| the studio had only $3 million to dispense to all creditors. The
| settlement's collapse would leave Weinstein's accusers with only
| the dicey prospect of pursuing further litigation."
|
| This is a story about insurance claims in bankruptcy. To the
| degree there is scope for reform, it's in exempting insurers from
| liability in cases of sexual misconduct. The downside: there will
| be less cash and a longer route to settlement for victims.
| bradleyjg wrote:
| It's not only about insurance. The directors got personal
| liability waivers.
| JumpCrisscross wrote:
| > _directors got personal liability waivers_
|
| Their personal liability stems from their Board seats. That's
| squarely in the purview of most D&O policies.
| bradleyjg wrote:
| It's covered by D&O policies by liability isn't capped by
| insurance.
| mtmail wrote:
| Article title is "How corporate chiefs dodge lawsuits over sexual
| abuse and deadly products". The HN guidelines ask "Please use the
| original title, unless it is misleading or linkbait; don't
| editorialize."
| dragontamer wrote:
| It should be noted that giving criminals immunity is the entire
| damn point of the system.
|
| The point of "immunity" is so that the lower-level criminals lose
| their 5th Amendment rights, and are therefore compelled to
| present evidence against their boss. The 5th Amendment in the USA
| states "Right against self-incrimination", but if you have
| immunity, you cannot self-incriminate.
|
| So once you sign that immunity document, you can be compelled to
| speak anything in court. Even if you "forgot", once you sign
| over, you can be __forced__ to talk.
|
| So yeah, I'm not entirely sure if "immunity given to group X" is
| a big problem? Its how courts work, its how we pin down the
| ringleader. Its often less important to get the lackeys, and more
| important for the officers to focus on the bosses.
|
| ---------
|
| Without the presentation of this evidence, you never get a guilty
| plea. Remember, in the USA's court system, you need to __prove__
| the defendant of wrongdoing.
|
| That means you either need to convince people, or force people,
| to present evidence in court that's helpful to your case. These
| people are often insiders, and immunity is extremely useful for
| getting around 5th Amendment issues.
| quantified wrote:
| Bankruptcy isn't a criminal matter.
| feet wrote:
| Also, "executives" don't sound like lower level
| whatwherewhy wrote:
| Aren't executives just doing what the board wants, and the
| board just following what the owners want?
| delusional wrote:
| And the owners what the market wants. Really you, the
| consumer, is responsible!
| iso1631 wrote:
| The consumer does what the marketeers want, which do what
| the executives want, and round we go. It's a vicious
| cycle of inefficiency from people trying to get larger
| parts of the pie rather than growing the pie.
| whatwherewhy wrote:
| Isn't creating new markets _the_ canonical strategy of
| doing startups?
| whatwherewhy wrote:
| Well not really. The owners are ultimately responsible
| for the company's behavior.
| judge2020 wrote:
| And yet the owners rely on the market/consumer giving
| them money to put food on the table and afford a roof
| over their head. Which is to say, user?id=delusional
| above was mostly joking.
| feet wrote:
| Corporations respond to profit motives above all else,
| but there are still humans making those decisions within
| the corporations
| lazide wrote:
| The shareholders will end up with the valuation they end
| up with, but are immune from prosecution in all but the
| most explicit and egregious cases.
|
| If they vote in directors, which they suspect will hire a
| criminal CEO, that's enough levels of indirection that
| unless they write a memo explicitly stating to do so (and
| maybe even then!), the worst outcome for them is the
| valuation of the company drops to zero and they lose
| their capital, minus whatever dividends have been pulled
| out.
|
| That is barring potential criminal conspiracy anyway,
| which would require concrete actions in furtherance of a
| conspiracy, which would be difficult to prove without
| something like that memo.
| WeylandYutani wrote:
| Look we were all just following orders.
| legulere wrote:
| You might enjoy reading meditations on moloch:
| https://slatestarcodex.com/2014/07/30/meditations-on-
| moloch/
| delusional wrote:
| After reading the first two chapters I'm hooked. Thanks a
| ton for recommending it.
| yunohn wrote:
| TFA is about Board Executives.
| bradleyjg wrote:
| I guess not everyone has time to read the articles before
| commenting.
| advisedwang wrote:
| If you admit to a crime while testifying in a non-criminal
| matter, you can be charged with that crime and that testimony
| can be used against you. Therefore you can take the 5th in
| non-criminal cases - as you have a right not to incriminate
| yourself in _future_ criminal matters. Therefore non-criminal
| courts can and do grant immunity against future prosecution
| (although I 'm not sure if it's jurisdictional, ie whether
| federal bankruptcy court can grant you immunity against
| future state charges).
| aidenn0 wrote:
| TFA is a bout civil immunity though, not criminal immunity.
|
| The first paragraph talks about the board of TWC allegedly
| knowing about Weinstein paying off people accusing him. One
| could make the argument that not acting on this knowledge
| to protect the value of the is an abrogation of their
| duties as board members.
|
| However the board was granted immunity in Chapter 11, so no
| such arguments can be advanced in court now.
| [deleted]
| ilyt wrote:
| well, unless the ringleader is one that got the immunity...
| harimau777 wrote:
| Aren't the executives generally the ringleaders?
| dragontamer wrote:
| No.
|
| Lets say Weinstein was the target. Then all the executives
| around Weinstein are the lackeys. So you offer immunity to
| the lackeys (aka: the executives in the inner-circle) so that
| you get Weinstein.
|
| Offering immunity to the low-level janitor doesn't do any
| good. You need someone high-enough that they're in the "inner
| circle" of the target. Someone with real dirt on your target.
|
| ---------
|
| Its very common in criminal court to give immunity to mob
| bosses, to get dirt on even bigger mob bosses.
|
| Making an article saying "Only mob bosses get immunity" is
| counterproductive. That's the damn point of the grant-
| immunity system. You grant it to criminals to help catch
| other criminals.
|
| ------
|
| Lets put it this way: lets say there's some innocent
| bystander who happens to know what is going on. Police /
| Investigators don't even offer immunity to them, because they
| committed no crime, so there's no point offering immunity.
| You just ask the innocent dude to come to court and answer a
| few questions / testify on what they know.
| alixrjlkdjf wrote:
| Maybe because the example they gave on the article they were
| going after one person crime (rape), and the case that caused
| outrage is where the guilty bosses are already the guilty
| bosses and they still got deals.
|
| Would you not see any problem if (still using the article
| example) Weinstein was given immunity to report on his own
| rapes?
|
| Also it compounds the rage as it was what happened to all the
| banks in 2008, all the air cias after 1st covid, etc.
| legitster wrote:
| > Would you not see any problem if (still using the article
| example) Weinstein was given immunity to report on his own
| rapes?
|
| This article is about immunity from civil lawsuits - not
| criminal convictions.
|
| Honestly, with Weinstein in jail, I could care less that
| people can't sue him for all the nothing he now has.
| dragontamer wrote:
| > Would you not see any problem if (still using the article
| example) Weinstein was given immunity to report on his own
| rapes?
|
| Weinstein is the boss. So you'd never give him immunity to
| the case, he's the target.
|
| If Weinstein had a close "ally", who was less important for
| justice but important to testify for the case... even if that
| "ally" had crimes associated with him, you'd want to give
| that "Hypothetical ally" immunity. _THEN_ you force the ally
| to talk (if the ally fails to talk in court, you throw him in
| jail for contempt of court, and take away their immunity).
| cool_dude85 wrote:
| >Weinstein is the boss. So you'd never give him immunity to
| the case, he's the target.
|
| In the article it says that Weinstein was practically given
| immunity to personal lawsuits related to the class action.
| Individual members of the class were able to retain the
| right to sue him personally in exchange for taking 1/4 of
| their payout in the bankruptcy proceedings.
|
| Anyway, aside from the specific inaccuracy of what you're
| saying here, this whole argument is mush-headed slop.
| You're talking about criminal cases, the article is about
| bankruptcy proceedings and civil lawsuits against
| individuals. You might as well say that you'd never give
| Weinstein immunity because in video games making some
| enemies fully immune to elemental attacks makes class
| balance difficult.
| JumpCrisscross wrote:
| > _the article it says that Weinstein was practically
| given immunity to personal lawsuits_
|
| Weinstein is in jail. (The victims "could opt out of
| giving lawsuit immunity to Harvey Weinstein himself - but
| only if they agreed to reduce their portion of the
| settlement payout by 75%," which seems fine, this is a
| civil proceeding and the point of bankruptcy is to draw a
| line under liability.)
|
| The "blanket immunity" in the HN title misleadingly
| refers to Board members being released from liability.
| cool_dude85 wrote:
| > this is a civil proceeding and the point of bankruptcy
| is to draw a line under liability.
|
| This is a bankruptcy proceeding regarding the liability
| of Weinstein's company. What's that got to do with Harvey
| Weinstein's, the living person's, liability, other than
| the fact that you can convince a judge to waive it? Much
| less the people who served as the company's BoD?
| JumpCrisscross wrote:
| > _What 's that got to do with Harvey Weinstein's, the
| living person's, liability_
|
| Weinstein the person caused the company's liability. The
| insurers paying out for the latter are also connected to
| the former. They won't agree to a bankruptcy plan that
| leaves them on the hook for further litigation.
| cool_dude85 wrote:
| >Weinstein the person caused the company's liability
|
| His actions on behalf of the company, and the actions of
| others also acting on behalf of the company. He is just
| one of the individuals whom one could reasonably expect
| to be held liable in a civil suit.
|
| >They won't agree to a bankruptcy plan that leaves them
| on the hook for further litigation.
|
| They will if a plan that doesn't absolve these covered
| individuals of liability is not offered, or is not able
| to be offered. And if they don't agree to a plan, oh
| well.
|
| Remember that if there's a policy choice between allowing
| this practice, which allows for a liability cap to be
| negotiated in bankruptcy court , or disallowing it, the
| insurers have every reason to rattle their sabers about
| refusing bankruptcy or going out of business, because the
| status quo benefits them greatly. So they might say they
| won't agree to any other plan, but that could be just
| talk until you refuse to offer them such a sweet deal.
| naasking wrote:
| > Without the presentation of this evidence, you never get a
| guilty plea.
|
| Firstly, I don't necessarily agree that you could never get a
| guilty plea. The government has lots of resources and the
| threat of scrutinizing you and going after you for years is a
| significant pressure. For sure this can be abused, but my point
| is only that this blanket assumption that the government just
| has to grant immunity or throw up its hands seems like a false
| choice.
|
| Secondly, total immunity is a pretty broad guarantee though.
| Why not trade a maximum penalty for that evidence, instead of
| no penalty at all?
| dragontamer wrote:
| > Why not trade a maximum penalty for that evidence
|
| Because of 5th Amendment issues.
|
| If there's a penalty associated with talking about evidence,
| then they'll just plead the 5th Amendment. Only with total
| immunity can you bypass the 5th Amendment and _FORCE_ them to
| talk.
| pessimizer wrote:
| > Because of 5th Amendment issues.
|
| What does the 5th Amendment have to do with offering
| someone a plea deal on some count in return for testimony,
| and immunity for other things that come up in that
| testimony?
|
| I'm pretty sure it's common.
| naasking wrote:
| Sorry, I don't see how that follows. A guarantee that "you
| will only get sentenced for X years regardless of what you
| admit" does not seem meaningfully different if X is zero or
| one.
|
| edit: not meaningfully different with respect to the 5th,
| obviously it's meaningfully different with respect to
| "justice", as getting off scott free rubs many people the
| wrng way.
| dragontamer wrote:
| If X is zero, you did not admit to the crime (and
| therefore, the 5th Amendment doesn't apply)
|
| If X is non-zero, you admit to the crime (and therefore,
| retain the ability to plead the 5th).
| naasking wrote:
| I don't understand. Any immunity deal entails revealing
| criminal behaviour. That is an admission, and admission
| is the whole reason immunity is granted.
|
| Edit: the point being that the limit on their sentence is
| contingent on not pleading the 5th.
| dragontamer wrote:
| > Any immunity deal entails revealing criminal behaviour.
|
| You are mistaken.
|
| Lets say "Alice" is the boss you're after, and Bob is a
| close associate of Alice, and Bob _MIGHT_ have committed
| a crime. Nobody knows if Bob is actually a criminal (and
| indeed, Bob is in that weird grey-zone of the law,
| skirting legal issues and just barely being legal). You
| give Bob immunity so that he's more comfortable in
| testifying in court. "Just in case" his actions
| constitute a crime. Especially if Bob knows something
| about Alice (just in case Alice is "The Boss")
|
| Immunity doesn't "entail" criminal behavior. It just
| entails likely criminal associations (which is NOT a
| crime). Immunity protection ranges from everywhere from
| "Completely innocent but they wanted immunity, so might
| as well give it to them", to "Completely guilty, but
| getting their testimony will get bigger fish", and
| everything in between. Its a tool, like any other tool it
| has proper and improper uses.
| gruez wrote:
| >Firstly, I don't necessarily agree that you could never get
| a guilty plea. The government has lots of resources and the
| threat of scrutinizing you and going after you for years is a
| significant pressure
|
| Realistically speaking government resources is still limited.
| They can bring the hammer down on Julian Assange because he's
| a high profile person they want to make an example of, but
| that approach isn't scalable for every mid level manager that
| they want to investigate.
| kaiju0 wrote:
| Bankruptcy is a deal with the court on restructuring or
| insolvency. Both parties have to agree. They will simply not take
| the deal if the risk is high for them.
| cool_dude85 wrote:
| The article specifically mentions this objection. Many of the
| plaintiffs don't agree and the settlement is forced on them
| anyways by the judge. In fact, even people who aren't involved
| in the lawsuit at all, and so never agreed or disagreed, can
| get nailed by this.
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