Corporate Bankruptcy Reform
      The criminal thefts of stockholders equity via "stock buybacks" and the fraudulent transfers of equity for little or nothing of value to the owners of major American publicly owned companies via "mergers and acquisitions" have left vast swaths of once great companies de facto bankrupt. Their filings with the SEC would have only to be transformed into court documents to complete the wipeout of cash paid public stockholders, most of the unsecured creditors, and even many of those pretending to secured status. This topic is intended to address what "should be" done to reform the current criminally facilitative bankruptcy laws.
      In the reformed corporate bankruptcy law, "Bankrupting Act" is defined as any of the following described activities: (1) repurchase of shares of stock from any person or group of persons at any price more than the Net Tangible Equity of the corporation calculated three months *after* the "stock buyback" is carried out; (2) any acquisition or merger in which more than 5% of the Net Tangible Equity, calculated as above, was paid for "Goodwill" a/k/a "excess of price paid over fair market value of assets acquired" or for any other "intangibles" (including software, licenses, and every other form of intangible "asset") acquired in the acquisition or merger; (3) any selective transfer of assets of the corporation to any person or group in any "reorganization" or similarly styled arrangement carried out on any nonratable basis. So-called "dutch auctions" used for any of these bankrupting acts shall be deemed NONratable fraudulent transfers of the property of cash paid public stockholders.
      In the reformed bankruptcy laws, "Bankrupting Official" shall mean every officer, director, and every employee of the corporation whose aggregate remuneration including all benefits receivable at any future date exceeded $100,000 per annum at the time of the Bankrupting Act. Bankrupting Official shall include not only those holding such positions at the "time of filing" with the bankruptcy court, but all such within a period of seven years prior to the filing unless it is proven during the bankruptcy proceedings that no Bankrupting Acts occurred during the tenure of that official.
      No Bankrupting Official shall be permitted to hold any position as an officer, director, or highly paid employee or consultant to the subject corporation after it is released from the bankruptcy court. Nor shall any such Bankrupting Official be permitted to hold any such position in any other publicly owned corporation for a period of no less than seven years after the Bankrupting Acts. In any bankruptcy proceeding where the ownership interest of cash paid public stockholders is impaired or obliterated, all personal assets of every Bankrupting Official shall be available to the full extent of all monies or values received by them during the time period when they were officials of the corporation bankrupted by their Bankrupting Acts, or receivable by them at any future time. No "insurance" coverage shall be allowed for perpetrators of Bankrupting Acts which maintains them personally whole while destroying the lives and fortunes of cash paid public stockholders.
      There are rather a lot of major felons running around these days, gutting and looting formerly great American publicly owned corporations, stealing all of the stockholders equity for their own personal benefit or for the benefit of their criminal cronies in the stock maniipulation businesses, who might find it necessary to behave quite differently if these changes to bankruptcy law were in fact to be made. All the more reason that I propose that the criminal thieves and "creative destroyers" of the American financial system in fact be held responsible for their criminal acts against the American people abrogating Article IV of the US Constitution Amendments (which prohibits the kinds of illegal seizures of the property of American citizens which their criminal thefts invariably entail).

      Bob Grumbine, September 2, 2008

This article was originally written for the Facebook group "Readers of SEC Financial Reports".  Having noticed that MySpace allows people to see blogs without signing their lives away (what FB requires) to become members of MySpace, I added it there as a blog on 090221 about 9:37am PST.  Subsequently on 090308 it became one of my blogs on Bob Grumbine's Central Blogging Site.  It was also posted "for awhile" on the egregiously abusive of elderly retired citizens AARP web site where their involvement in pushing fraudulent "insurance" scams and promoting the interests of other Worsingdone District of Corruption criminal gangs led them to encourage the New Inquisition of the Oh! Bomb Ah regime whose impacts have included increasing the "wrongful killings" by the Guild of Torturers Maimers and Murderers from the previous 90,000 per year up to more than 100,000 per year.
      A desirable addition to this blog came to my attention on 090223 about 10:53am.  The NY Times Online told me "Less than a month after becoming the head of the Securities and Exchange Commission, Mary L. Schapiro is moving swiftly to reverse major decisions by her predecessor".  For that effort to have gained any credibility whatever, it would have had to address the two central criminal theft systems set in place.  (1) The "Direct Registration System" which puts investor assets into the permanent adverse possession of criminal gangs in the transfer agent busymess who have regularly stolen cash income for market manipulating "reinvestment" scams devoid of consent of the owner of the money and occasionally vaporized assets altogether devoid of consideration to the owners of the securities vaporized.  (2) The practice of allowing "stock buybacks" which gut and loot all and more than all of the equity of cash paid public stockholders, its ratable owners, on behalf of insider and criminal crony "sellers" must be terminated, not subjected to "rules" to prevent the criminal thieves stumbling over each others feet.  Neither essential was ever addressed during the ludicrously hyped tenure of Ms. Schapiro.  Instead, when the industry "rules" about "segregation of customer assets" were flagrantly violated by former Gulled Mon Sux CEO, former Snitter, former Goofernor of New Jersey, and most recently chief honcho of MF Global, Jon Corzine, to such an extent that forensic analysts couldn't even find a billion dollars of customer money, there was not even a hint from the Schapiro run SEC about unwinding the felony abrogations of Article IV US Constitution Amendments previously authorized by that agency in the form of illegal seizure of customer securities into such pretended "segregated" holdings of criminal gangs in the fraud and theft industry.

 [Comment to webmaster]        [back to top of page]        [back to Bob's Central Blogging Site]