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Thread: San Bernardino paid $2 million in cash-outs before bankruptcy filing

  1. #1
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    San Bernardino paid $2 million in cash-outs before bankruptcy filing

    Exclusive: San Bernardino paid $2 million in cash-outs before bankruptcy filing - Yahoo! News

    LOS ANGELES (Reuters) - The California city of San Bernardino paid $2 million in cash-outs to employees for unused vacation and sick time in the three months before declaring bankruptcy on August 1, data reviewed by Reuters show.

    City officials chalked up the payment spurt to coincidence and other factors. Still, the payments may run afoul of a core provision of the bankruptcy code that imposes strict rules on the types of payments that can be made immediately prior to a bankruptcy, according to bankruptcy lawyers who are not involved in the case.
    Very interesting article.
    Looks very bad for the city, as it reeks of favoritism to their employees without paying other debts.
    Also looks to be illegal payments, as they were done less than 90 days prior to filing bankruptcy.
    Some payments were made the day before the filing.

    Oopsie! They are busted.
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    Re: San Bernardino paid $2 million in cash-outs before bankruptcy filing

    Quote Originally Posted by SMTA View Post
    Exclusive: San Bernardino paid $2 million in cash-outs before bankruptcy filing - Yahoo! News



    Very interesting article.
    Looks very bad for the city, as it reeks of favoritism to their employees without paying other debts.
    Also looks to be illegal payments, as they were done less than 90 days prior to filing bankruptcy.
    Some payments were made the day before the filing.

    Oopsie! They are busted.

    I think unpaid wages get usually get top priority in a bankruptcy alongside taxes and secured debt.

  3. #3
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    Re: San Bernardino paid $2 million in cash-outs before bankruptcy filing

    This would be in addition to the majority residents sending most of their incomes to family in Mexico so that the money is never spent in the country that nurtures and supports them.

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