Pier 1, Brooks Brothers and Neiman Marcus. Many of them attribute their dire situations to the virus outbreak. It’s a convenient scapegoat that deflects the blame. The reality is that a majority of companies were mismanaged, piled on too much debt, engaged in stock buybacks that left them without emergency funds, paid their CEOs and executives lavishly and were not in sync with their customers nor innovated to stay current with the changing climate and trends.
According to Reuters, a large number of the big companies that sought out bankruptcy protection awarded millions of dollars in bonuses to their executives within months before filing. Their reporting shows that a number of companies, including J.C. Penney and Hertz, approved bonuses “as few as five days before seeking bankruptcy protection.” This may be due to a 2005 bankruptcy law that prohibits companies from “paying executives retention bonuses while in bankruptcy.” This prepayment looks like exploiting a loophole.
Source: Forbes (2020)