Congress Needs To Pass a New Rule To Adjust Bankruptcy Protocol

Gregory Germain, professor of law and director of the bankruptcy clinic, was interviewed by CBS News for the story “Bankrupt companies gave $165 million in bonuses to top execs before going belly up last year.”

Germain, an expert on bankruptcy, discussed the activity of companies who have recently gone bankrupt, saying, ‘The bankruptcy rules do not regulate what a company can do before it files for bankruptcy. Out of 7,300 companies that filed for bankruptcy last year, none asked for a judge’s approval for retention bonuses, the GAO found. Instead, many gave the bonuses beforehand. Congress can fix this by passing a new rule.’