Loyal Employee Burned By Bankruptcy Considering Revenge Default On Mortgage
Linda Amick worked for a big telecom firm for 24 years, climbing the ranks from lowly systems analyst making $14,000 a year to senior management.
"It was really a great place to work," Amick told the Huffington Post. She looked forward to a comfortable retirement on a few acres in a small town 50 miles from Atlanta, Georgia.
So much for that: Nortel Networks filed for bankruptcy protection in the U.S. and Canada in January, eliminating Amick's job.
Now, stuck in a home she bought on that small acreage in Maysville (pop. 1,247) just one week before the bankruptcy filing, Amick is pondering revenge.
"If I don't get rid of [this house], I don't want to stay here anyway, so they're going to ruin my credit," she said. "So what? I'll never be able to own a home again anyway. Honestly, I'm so angry, if I don't sell this house -- and let me tell you, it's been on the market six months for far less than I paid for it and not one person has looked at it -- I'm very much contemplating [defaulting on the mortgage], hopefully contributing to the demise of Wells Fargo."
Nortel's bankruptcy reminded Amick of last fall's wildly unpopular Wall Street bailout.
"Lemme tell you how big of a ripoff it was," said Amick, a 58-year-old divorced mother of two. "They went into bankruptcy in January and they have been paying quarterly bonuses to the executives."
In March, bankruptcy judges in the U.S. and Canada approved Nortel's plan to pay as much as $7.3 million to eight executives while the firm is in bankruptcy. Company attorney James Bromley told Bloomberg News that management needs that kind of compensation "because of the high level of expertise for these individuals."
"Give me a break," said Amick. "How do you get a bonus for taking a company into bankruptcy? It's dumbfounding."
Doug Bernstein, head of Plunkett Cooney's Banking, Bankruptcy and Creditors' Rights practice called it a typical situation for a major bankruptcy. "It's allowed under the bankruptcy code. Is it fair? No."
(Bernstein noted that he, too, had a disappointing experience with Nortel. "Years ago I had the foresight to invest in Nortel stock," he said. "I got 12 shares left at 66 cents a share. I lost 99.9 percent of my investment." He doesn't expect to see a penny.)
The federal Pension Benefit Guaranty Corporation took over Nortel's underfunded pension plan in July and became its trustee on Sept. 8. Amick will probably be able to draw the full value of her pension, but she won't be able to pull the $260,000 lump sum for which she said she'd been eligible before the bankruptcy.
Not that she's ready for retirement. Amick said she's looking for a job and not finding anything. She said she's certain she'll have to leave Maysville to find work, and that she may take the opportunity to gouge Wells Fargo for the $185,000 she owes on her mortgage.
"I don't know if most Americans feel this way. My sense of fairness has been just violated with the Federal Reserve bailing out these big banks, and every day I read about these big banks and Goldman Sachs is getting these $16 billion bonuses," she said. "I wish rich people every happiness in the world. It's not like I have rich people envy, but it's like they sucked all the money from us. They've been bailed out by us. You just wonder how much outrage the American citizens can tolerate before there starts to be revolt."
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First Posted: 09-25-09 11:50 AM | Updated: 09-25-09 01:04 PM