Behind the bankruptcy tactic shielding corporate executives from accountability
How do corporate executives shield themselves from accountability — even when it comes from actions they personally undertook?
These days, they often turn to bankruptcy court, and use a tactic called a non-debtor release.
These releases give corporate leadership, executives and board members, immunity from lawsuits related to the bankruptcy case for life.
Non-debtor releases have been used by the Sackler family regarding oxycontin cases, and even Harvey Weinstein, who’s been found guilty of sexual misconduct.
They’re not the only ones.
“We reviewed more than 600 bankruptcy cases over the course of a decade, and we found that judges approved non-debtor releases in 90% of the cases,” reporter Mike Spector says.
And the releases were approved by judges even when claimants didn’t want them.
Today, On Point: Big money, big companies, and bankruptcy shields.
Mike Spector, U.S. corporate crisis correspondent at Reuters. Lead author of the Reuters investigation How corporate chiefs dodge lawsuits over sexual abuse and deadly products. (@mike_d_spector)
Clifford White III, attorney. Former director of the U.S. Trustee Office, known as the watchdog of the bankruptcy system. Managing director for bankruptcy compliance at American Infosource, a financial technology company that provides services to major financial institutions.
This article was originally published on WBUR.org.
Copyright 2022 NPR. To see more, visit https://www.npr.org.