Reuters
Nearly a third of more than 40 large companies seeking U.S. bankruptcy protection during the coronavirus pandemic awarded bonuses to executives within a month of filing their cases, according to recent analysis. Under a 2005 bankruptcy law, companies are banned, with few exceptions, from paying executives retention bonuses while in bankruptcy. But the firms seized on a loophole by granting payouts before filing. Firms paying pre-bankruptcy bonuses know they would face scrutiny in court on compensation proposed after their filings but the trustees have no power to halt bonuses paid even days before a company’s bankruptcy filing, allowing firms to escape the transparency and court review.