Government boycott of Bank of America is misguided

You missed the point. No one was asking BOA for credit to keep the business open, but to close gradually and pay workers what they were owed, both legal obligations. If BoA can lend money to a business while it is profitable, they too should have some legal liability to fund a gradual closing down and be held to the same laws as the company. Keep in mind, they profited too.

Here is a quote from the NY Times (and a link to the article) that was apparently overlooked in the preparation for this article:

"The statement [released by the company] suggested that it had gone back and forth with Bank of America for more than a month, but that the bank had rejected several of its “wind down” plans as well as the company’s request for financing to pay workers’ owed vacation."

http://www.nytimes.com/2008/12/09/us/09chicago.html?scp=2&sq=republic%20windows&st=cse

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Also, don't "feel bad" for the company. It's majority owner has already opened a new one, Echo Windows LLC.

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the government has done enough damage to our country already with the forcing of banks to put everyone of the people in this country into a home. now do you think they should be alllowed to force them to lend money to more companies who can't pay they bills. this will only make matters worse than they are now.

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Tracy,

The following is a quote from a Chicago Sun-Times article outlining the role of BoA in forcing the abrupt shut down of the plant:

"Timeline

Oct. 15 -- Republic Windows & Doors tells Bank of America that Republic had a party committed as of Oct. 24 to assume the company's $3 million in debt. Bank of America rejects the offer, demands a plan for an "orderly" wind down of Republic.

Oct. 16 -- Republic presents a plan for ceasing its manufacturing in January 2009 and tells Bank of America of possible worker notice issues and vacation pay covered by the WARN Act, which helps ensure advance notice of plant closings and mass layoffs.

Oct. 18 -- Bank of America demands a shorter shut-down period.

Oct. 27 -- Republic presents a new plan to cease operations in January.

Oct. 29 -- Bank of America rejects it.

Nov. 25 -- Republic requests permission to issue vacation pay to all employees.

Nov. 26 -- Bank of America rejects the request."

http://www.suntimes.com/news/politics/1319712,blagojevich-bank-of-america-sit-in-120808.article

There is a bigger issue at hand here, really, and that is one of liability for loans. Since Republic was an LLC, its owners cannot legally be held responsible for the debts of the company should it fail. So basically, they walk away with their profits while workers lose their homes and livelihoods and taxpayers end up paying off the loans ($25 Billion in bailout funds for BoA). In this case, they apparently had guaranteed the loans through an outside party, but the problem remains that business owners are not responsible for their own mistakes legally. Hence, Echo Windows, LLC being created in a place where labor costs are cheaper.

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Screw Bank of America. This is a no good bank thats waits til people charge up their credit cards then readjust their interest rates to default rates for no reason. They did it to lots of people I know who have never been late on a single payment. It took them over 15 days to clear a check I put in from a major U.S. bank that uses the new check clearing system. I think they held the money on purpose to earn interest. Do what I did with this no good bank cut up all your credit cards after maxing them out and don't pay a nickle on the balance. Also close all your accts with them,who needs them anyway!

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Tracy, other than feeling bad for the workers, would you propose any solution to getting the workers the money that they're owed by law? Or do they just have to take one for the gipper, while Republic Windows moves the shells around and becomes Echo Windows LLC? (and does ANYone know who provided the money or financing for Echo to buy the division of Traco and it's factory in Iowa?)

http://www.community-organizer.com

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We'll have to agree to disagree on this one.

It was Republic's owners who have legal responsibility to have the worker's severance pay available to distribute to them. So, if anyone should be on the hook here, it should be the owners.

Bank of America should then pursue the owners through the legal system with whatever options are available to THEM, to collect on the credit extended to the owners to pay the workers what was already legally due to them.

I must say that asking laid-off workers, without jobs, income, or healthcare, to pursue the owners is a ludicrous suggestion, out of touch with reality, and displays to me an incredible lack of sympathy on your part. If my father or mother was one of those workers....Grrr...Can you really imagine what you suggest? Instead, those owners now need to be pursued by both BofA for repayment, AND by the Federal government for acting in bad faith, if not violating terms of the WARN act or whatever other laws they were supposed to obey.

And, by the way, if I was a worker at Echo Windows LLC, I'd be a little worried, and quite skeptical of who I work for. Wouldn't you?

http://www.community-organizer.com

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Tracy, that's not an unfair question: why don't *I* put up the money? You're not the first to ask it, either. I made some suggestions on my blog about ways to get the workers their money, and also blogged an answer to the question, here: http://communityorganizer.wordpress.com/2008/12/10/why-dont-i-pay-the-republic-windows-workers-what-theyre-due/

And I don't even note that had *I* been granted an extra $25 Billion of bailout money, as BofA was, I would feel that loaning - or even giving - a paltry $1.5 Million shouldn't be a hard pill to swallow. (But that's neither here nor there. Ethics, morals, doing the right thing, etc. No place for that in Business 101, I know.)

But for some reason, you just don't want the workers to get what they're legally entitled to, at the time they're due it, now do you?

Republic did not have funds put aside in order to meet their legal obligations when they shut down? Tough luck, workers; see you in Court! BofA won't extend any further credit? Sorry, workers, that's just...well...good business.

Look, the financial world is not collapsing and will not collapse because BofA extended about $1.5 million in further credit; yet some 300 families will have a somewhat merrier Christmas - one they've worked for - because of the loan.

"Merry" not a good enough benefit on a spreadsheet for you? OK, how about this: now 300 workers have a small cushion to see them through an illness and a job hunt so they can be productive workers again, helping the recovery versus being a drain on it or falling through the cracks, as is more likely with no job, zero income and no healthcare.

The workers did the right thing in staying put until they were guaranteed to get what was rightfully theirs. BofA did the right thing by extending the credit necessary. Will Republic do the right thing and pay BofA back? Best case, yes (hey, sell that Iowa plant and use the proceeds...) Worst case, no - and BofA takes a write-off. Will that hit my pocketbook or make matters worse on Wall Street? If so, THAT's a price I'm willing to pay to send those workers home with their due, but apparently not a price that you are willing to pay.

And that's why I'm...ProudOldLefty.

Peace!

http://www.community-organizer.com

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