Marginal Successes, Revised Expectations, Broken Promises – A Presidency in Review

Part 3: No New Bankruptcy Protections for Workers and Retirees

While on the campaign trail, presidential candidate Barack Obama promised to protect the wages, pensions, and benefits of employees and retirees who became creditors of bankrupt employer-corporations.

There were two essential prongs to Obama’s campaign promise of corporate bankruptcy reform. First, bankrupt corporations would be prevented from doling out executive bonuses while wages went unpaid and retired worker pensions vaporized. Second, employee-creditors would be permitted to petition the bankruptcy court for a larger portion of their unpaid wages and benefits, giving them greater priority among ranking creditors. The first prong is discussed in this Part 3, while the second prong is discussed in Part 4.

Obama Promised Reform: Protecting Employees and Retirees with Prohibitions on Executive Bonuses from Bankrupt Corporations.

A noble cause for the campaign, Obama pledged to change the bankruptcy rules to prevent corporate funds from being...