Bank Of America Caves, Gives Money To Republic For Employees

Wow, this is going to be a bad idea down the road.

Bank of America today sent a letter to Republic Windows & Doors LLC indicating that the bank is prepared to provide a limited amount of additional loans to Republic to help fund a comprehensive resolution of Employee Claims.
Bank of America expressed concern in the letter about Republic's failure to pay their employees the Employee Claims to which they are legally entitled.
Bank of America is prepared to make these additional loans despite the fact that Bank of America is not obligated to pay Republic's employees or make additional loans to Republic.
Because Bank of America has no direct relationship with Republic's employees, Bank of America must rely on Republic and its management to negotiate with the Union and Republic's employees regarding the Employee Claims.

Didn't we get into this crisis by giving loans to people who couldn't pay them off? And from now on if you get laid off, aren't you just going to sit you ass down and demand a buyout?

Some background here if you weren't following this yesterday.

Posted by: DrewM. at 03:40 PM

Comments

1 This is bad for every hard working, law abiding citizen of this, now socialist, country.

Posted by: dfbaskwill at December 09, 2008 03:42 PM (4L5Tl)

2 This is a bad idea right now. And why none of the bailouts should have been supported. Instead of general taxpayer funds being wasted, now anyone with savings at BoA is being robbed, just to mollify some union parasites.

Posted by: Methos at December 09, 2008 03:42 PM (cvMcH)

Is Bank of America offering charity to random people now? How is this a sound business decision in any way?

They're doing it because they have all that sweet, sweet bailout money in their vault to spend on public relations bullshit now. It's not like they'll ever have to actually pay it back.

Posted by: Jim62sch at December 09, 2008 03:43 PM (zYagu)

4 Jesse Jackson's Slush Fund boycott warning must have worked it's way up the food chain at Bank of America.

Posted by: Paul at December 09, 2008 03:43 PM (o31m1)

5 WOW. Time to close my account and switch to Wells Fargo.

Posted by: portfolio at December 09, 2008 03:46 PM (Vw4NE)

There is this:

"pay their employees the Employee Claims to which they are legally entitled."

While BoA is under no obligation to continue lending to Republic, Republic has a legal obligation to the employees. The employees are not asking for anything they are not legally entitled to, under Illinois state law.

Posted by: notropis at December 09, 2008 03:46 PM (1ucvq)

7 America used to be the place in the world where hard work, achievement and excellence was rewarded.

Now we reward the opposite.

Bye bye Miss American Pie...

Posted by: ToddK at December 09, 2008 03:46 PM (8enMS)

8 PS - Where the fuck is my car payment money and bucket of fried chicken delivered on the back of a unicorn?

Posted by: portfolio at December 09, 2008 03:47 PM (Vw4NE)

9 Tomorrow is going to be freakin' AWESOME! "Hello, Boss? I'm gay and I'm broke. PAY ME!"

Posted by: kiffen at December 09, 2008 03:49 PM (XnuxH)

10 Grasping defeat from the jaws of victory, BOA caves in to the moochers.

Posted by: WalrusRex at December 09, 2008 03:49 PM (DVVXZ)

Given that idiot Governor Blagojevich of Illinois, who extorted Bank of America into offering this sop, just got arrested for trying to sell Obama's vacant senate seat, perhaps this offer will be "held up in negotiations" for a long while and eventually forgotten.

Posted by: Wm T Sherman at December 09, 2008 03:50 PM (w41GQ)

12 I've been muttering aloud for years that this country has become a giant cumdumpster for all manner of losers and Natural Rejection, instead of selection. People have been coddled by the Nanny State for so long that they have no idea how to take care of themselves, let alone the 3 kids they shit out. So the successful minority of Americans are now burdened with supporting the masses of what should have been swallowed loads or money shots.

Bad deal all around. Need to find another country that despises socialism and has a representative democracy in case this deal goes south.

Posted by: portfolio at December 09, 2008 03:51 PM (Vw4NE)

13 I know everybody has been castigated, but has everybody in this country been castrated?

The law is such that the bank will be responsible to cover any payroll taxes due as part of this. No doubt Revrum Jackson has expenses, too. Those turkeys didn't grow on trees

Posted by: everything will be fine when I get my unicorn on January 21st at December 09, 2008 03:52 PM (9tVki)

14 The employees are not asking for anything they are not legally entitled to, under Illinois state law.

No, but they do appear to be demanding that a third party with no legal obligation to pay them must do so.

Hell, if BoA is just giving out money now, I have a huge huge student loan I'd love for them to make go away. Let me know what building I have to take over to get that.

Posted by: alexthechick at December 09, 2008 03:52 PM (SHHaV)

I do have not problem with Bank of America making a loan to Republic as long as Republic will be able to pay the loan back. That's what banks do. I don't blame the worker for wanting what he thought he was contracted to get. Their anger though should be directed at Republic and not B of A.

Posted by: polynikes at December 09, 2008 03:53 PM (m2CN7)

16 Stuck on stupid.

Posted by: Kensington at December 09, 2008 03:54 PM (fhJCy)

17 Alex, considering current conditions, start screaming that you need money for future abortions you are anticipating. Somewhere in the range of 4-5000. And anyone who questions your need or right to get such money, you pound them over the head in the MSM with: "You bastard, trying to take away my right to choose 4-5000 abortions!"

Pelosi will probably hold a fundraising event for you and your death-warranted eggs. Have to work the Democratic machine is all.

Posted by: portfolio at December 09, 2008 03:57 PM (Vw4NE)

18 The Gov was putting out threats to them.

Wonder if they will back off from this now that he is in a heap of crap?

Posted by: Lurker of sorts at December 09, 2008 03:57 PM (1aM/I)

"Their anger though should be directed at Republic and not B of A."

I agree.

Posted by: notropis at December 09, 2008 03:57 PM (1ucvq)

20 I guess PR outweighs good business decisions at BoA. Of course, good PR might keep the fed money rolling.

Posted by: Penfold at December 09, 2008 04:01 PM (lF2Kk)

Guys, the is the CRA all over again. Banks pay to play and pay it to go away. BoA has 12% of ALL the bank deposits in the NATION.

Do they need bad publicity? Will this cost them money? Yes. As much as they pissed away at the commie olympics? No.

A drop in the bucket. The shakedown continues. They are

WHORE!

They exist ONLY by a GOVERMENT grant. THEY ARE WHORES BY DEFINTION.

This is not too hard to figure out, and there should be no outrage.

Shit, I, too, "was shocked to hear there was gambling going oh"

Maybe they are just happy the Panthers kicked ass last night in "Bank of America Stadium"

Kemp.

Posted by: kempermanx at December 09, 2008 04:06 PM (2+9Yx)

22 I going on strike until Ace pays me what I think I am worth as a commenter. I am going to keep this site open in my browser until he gets BoA to loan him lots of money. I'm prepared to leave my browser open as long as necessary.

Posted by: Steve L. at December 09, 2008 04:08 PM (Gkhxf)

Does anyone have a clue what the loan amount was? I bet under $10,000,000.

That is not even an audit-able about to BoA.

WTF is the interest for a day on the $25 billion you and I gave BoA? Someone figure it out.

Kemp

Posted by: kempermanx at December 09, 2008 04:12 PM (2+9Yx)

24 Most of BofA's business is consumer banking (not investment banking). So their main business model relies on the average consumer to open & maintain savings/checking accounts with them.

BofA probably did the calculus and decided that giving a little more money to Republic would be cheaper than the cost of the PR required to convince average consumer that they are not evil. In fact, it might create a bit of misguided goodwill and bring in more business.

If it didn't make business sense, BofA wouldn't have done it.

Posted by: Che Pizza at December 09, 2008 04:16 PM (SPSOE)

OK the interest for a month at 2% on 25 billion is over $41 million. I think BoA made a good loan.

Kemp

Posted by: kempermanx at December 09, 2008 04:16 PM (2+9Yx)

26 Portfolio - That is a brilliant idea! I may have to ponder doing that.

Posted by: alexthechick at December 09, 2008 04:20 PM (SHHaV)

27 Boycott all of the banks who got TARP money. Stay away from them, not because of some notion of loyalty to the free market system of capitalism which has resulted in the strongest economy in the history of the world, but because they have the fishy stink of corporate mismanagement about them.

Posted by: Loren Heal at December 09, 2008 04:23 PM (1/FwS)

28 BTW, did BofA get any of the recent bailout money?

Didn't BofA recently buy Merrill Lynch right before ML was about to go bankrupt (~Sept)?

If BofA was in real trouble, I can't see them being able to afford this kind of a purchase.

Posted by: Che Pizza at December 09, 2008 04:24 PM (SPSOE)

29 We are seeing the end of our country as we knew it. The late great America. Between the politicians and the businesses - its over. The end of prosperity.

Posted by: Lily at December 09, 2008 04:30 PM (hPsuK)

30 27, 28 Wasn't the bank bailout money forced on the top 9 banks, whether they needed it or not? I think the argument was that that the government didn't want to single any out by only giving money to the bad ones.

Oh and more government control (bleh).

Posted by: Methos at December 09, 2008 04:43 PM (cvMcH)

31 I, for one, welcome our new Banana Republic of the United States overlords. Calculating and acting upon risk/reward required just too much math. Best not to worry about it anymore. Just start handing out government-subsidized Valu-Rite and all will be well.

Posted by: AnonymousDrivel at December 09, 2008 04:45 PM (sI5Ho)

32 "We are seeing the end of our country as we knew it. The late great America. Between the politicians and the businesses - its over. The end of prosperity."

Nah.

I smell opportunity. I think the fundamentals are not as bad as the market indicates. There's a lot of fear & uncertainty priced into the market right now.

Its easy to make some money in a bull market. But you can get some great bargains in a bull market when everyone else is too busy shitting the bed.

You won't make money today or even next year on these bargains. But when things turn around (like they always do) you'll do better than just make some money. You'll be rich. Mark my words.

Posted by: Che Pizza at December 09, 2008 04:48 PM (SPSOE)

33 another good reason to despise BofA, not that i needed one.

what utter morons: unless i got the deed to the factory and all the equipment, i'd have told them to FOAD.

Posted by: redc1c4 at December 09, 2008 04:54 PM (vLw7K)

Bad idea down the road? It's a bad idea on the road this minute. Sucker BoA and it's customers are the ones going to pay this tab. Better suck it up BoA and expect blackmailing from all emplyees of any company USA. Just like the bailput, you caved once, you set precedence

I hat BoA anyway, they rip you off every which way they can

Posted by: Suckers at December 09, 2008 04:55 PM (B/Y39)

35 No, this is a good idea!

I'm calling my broker right now to arrange a short of BofA stock!

Posted by: gmsc at December 09, 2008 05:20 PM (AMrHH)

36 It was a cheap payoff. They are no longer the bad guys of the financial world, for peanuts.

The rest of us a doubly screwed, because of the precedent. Every failed business will be whining for its share, and where do you draw the line now?

Financial institutions only, to save the whole economy? Too big to fail, aka Big Motors? Anyone who can gin up the publicity?

We're paying them all. The clowns in DC who organized this mess are running the circus.

Posted by: MarkD at December 09, 2008 05:22 PM (qZFLO)

37 Why the hell should BoA care? They'll get the bill paid in yet another bailout by the Feds.

Posted by: Flubber at December 09, 2008 05:28 PM (UDqSH)

Didn't we get into this crisis by giving loans to people who couldn't pay them off?

Is there anything that has been done with the economy in the past 3 months that has made sense?

Posted by: katya at December 09, 2008 05:52 PM (G3frc)

39 This is one of those cases where they think its cheaper to pay off the bad publicity but later find out it was suicide.

Posted by: lonetown at December 09, 2008 06:32 PM (Gphqr)

40 Republic Windows reorganized as a new company and opened the day before or the day after they closed the IL plant in IA. Purpose : to start over without my unionized thuggish highly overpaid Odramatrons. They will not get away with this slight. They have an highly deserved IRS enel probe about to come due for this rest assured.

Posted by: Barack Hussein Odrama at December 09, 2008 07:11 PM (U3Nmj)

41 just remember to be in a union and have a sit down strile then invite Jessie jackson

Posted by: bob hussein dole at December 09, 2008 09:55 PM (yl9yA)

42 BOA didn't ask for any bail out money, they were forced to take it. BOA didn't need bad publicity- but they shouldn't have to pay a companies payroll when the company can't pay back their loan to BOA. BOA was forced to cough up the money to the workers because all the idiots in the Media somehow blamed BOA for not giving away money. Don't blame the bank, Blame the company who made the promise to it's workers

Posted by: DALE at December 09, 2008 09:58 PM (YQ5Fj)

43 I like reading about people I'll never get to spend eternity with. Kind of a wanderlust thing.

Posted by: Corona at December 09, 2008 10:07 PM (pI8vF)

44 I'm not as outraged as some of you by BofA's decision here. It's not unusual for longtime lenders to a failing company to put in some money to pay off claims that would complicate and delay the liquidation of their collateral. I don't know offhand whether the WARN Act would give unpaid workers a claim against the collateral, but someone would certain try to assert such a claim, and probably would try to claim that the lender was controlling the business enough towards the end that it should be on the hook for the company's unlawful decision to shut the plant down abruptly without complying with the WARN Act 60-day notice requirements. I'd be a lot more alarmed if BofA had caved and said it would loan a lot of money for the purpose of helping the plant pretend it could stay in business for a few more months -- kind of like the "investment" Congress is about to make in the Big 3 auto companies.

Posted by: Texan99 at December 09, 2008 11:07 PM (Hvsud)

45 I have recently discovered the answers to all of the questions about what's going on in America today.

Think everyone has completely lost their minds? Are you wondering where we're going and what we're doing in this hand basket?

It's all in a book I just discovered called "The Fourth Turning" - it will let you in on the reasons why we're all doomed for the next few years...because we have to be.

It's just nature...get used to it.

Posted by: The Haimster at December 10, 2008 12:17 AM (+RaPr)

46 Moving $ to Wells Fargo for their opposition to the socialist parade. Oh wait... I pulled my cash from Bank of America when the shitpots allowed accounts for illegal immigrants.

Fucking rot assbowl BOfA.

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