There is a wide-reaching effect on employees, board members, owners and customers when a company decides to go bankrupt. When a business declares bankruptcy, there are a variety of side-effects that impact people associated with the company. Customers lose confidence in the product, business owners must recompose themselves financially and employees of the company can watch years of savings disappear.
Kodak’s bankruptcy has been met with dismay from employees. Most of them invested in the 401(k) retirement plans offered by the company for years, and one of the ways they invested was through stock in the company. That stock – once valued at $31 per share – has plummeted to 35 cents per share, and as its worth has gone out the window, so have the retirement plans of many Kodak employees.
One employee is not idly standing by like he claims Kodak did during the company’s crisis. The employee is suing Kodak, claiming a failure to protect the retirement plans of its workers. Not only is the employee fighting for his own personal compensation, but also other employees affected by the bankruptcy. The employee wants any profits Kodak made from the busted retirement plans to be placed with a trust, enabling a split of the money between anyone who invested in Kodak retirement plans.
Management usually gets blamed by employees when a company declares for bankruptcy. It is a natural response to fault those in charge because, after all, they make the decisions regarding the company and when a company goes bankrupt, it would seem management put the business in that situation.
Many well-intended, hard-working individuals will be greatly affected by Kodak’s bankruptcy. Some will have their lives permanently altered due to the loss of their hard-earned savings. If those losses are substantial enough and it places them in a compromising financial situation, people may consider personal bankruptcy.
If you choose to go this route, remember to discuss your situation with an attorney that has experience in dealing with bankruptcy filings. Proper legal representation during a difficult financial time in your life is vital, as it can give you the necessary knowledge to make the best decision possible.
Source: Democrat and Chronicle, “Lawsuit takes aim at Kodak,” Matthew Daneman, Jan. 31, 2012
