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TOYS R US AND CHAPTER 11

March 21, 2018

TOYS R US AND CHAPTER 11

I have written incessantly about the crying need to (honestly) reform the internal revenue code and the bankruptcy act.

When bankruptcy judges are empowered to void labor contract and pension plans for corporate workers while approving bonuses for the executives of such corporations it becomes clear to a fault that the statute which allows such wrongdoing is in need of serious repair, and the lopsided tax treatment of capital at the expense of labor has been unfair for so long as not to need description.

What we are seeing in this particular Toys r Us foray into Chapter 11 is seen all too often > Hedge funds buy the company, load it up with debt while running away with the accounting “profits,” then upon its “failure to perform” run off to bankruptcy court with a Chapter 11 petition upon which the court typically takes away negotiated rights of its workers in (among other) perhaps vain attempts to keep the company in business, attempts which often fail, after which vulture corporations such as the one Romney retired from come in and cannibalize the company’s assets or, in some instances, come up with a plan to continue in business which the court will approve – and the beat goes on, and on, and on, as the financialization of commerce and industry and privatization of government continue.

Without real reform of both the internal revenue code and the bankruptcy act it’s almost enough to make one consider becoming a socialist. Almost but not quite. Yet.       GERALD       E

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