[johnnybowman]

To add insult to injury, this is from the April 2019 Stanford law review:

"Almost half of all the coal produced in the United States is mined by companies that have recently gone bankrupt. This Article explains how those bankruptcy proceedings have undermined federal environmental and labor laws. In particular, coal companies have used the Bankruptcy Code to evade congressionally imposed liabilities requiring that they pay lifetime health benefits to coal miners and restore land degraded by surface mining. Using financial information reported in filings to the Securities and Exchange Commission and in the companies’ reorganization agreements, we show that between 2012 and 2017, four of the largest coal companies in the United States succeeded in shedding almost $5.2 billion of environmental and retiree liabilities."

https://www.stanfordlawreview.org/print/article/bankruptcy-a...

[Cthulhu_]

If a company can escape their (financial, environmental, social) responsibilities by filing for bankruptcy before they have to pay out, they should be paying it forward.

In my country, pension funds are always separate companies from the employers; they have to deposit part of your wage into the pension fund, after which they can no longer touch it (because well, it's your money).

Of course, whether the pension companies handle it appropriately is another matter.

[bko]

Pension funds are generally defined benefit, as opposed to defined contribution. This means that they guarantee a retirement benefit. The problem with that is the companies often invest a portion assuming an unrealistic growth rate. The problem is worse when you consider that the effects of the underlying under-investment won't be felt until the current workers retire and start drawing on their funds. In other words, the people making the investment decisions today likely won't be around for the reckoning. This leads to a situation where a business today could be held hostage by employees from 30 years ago forcing current employees to suffer, prior employees to have their benefits cut and newer companies without these legacy costs to benefit.

Defined contribution means the employer puts away a certain defined amount for every employee and the employee is entitled to that. This removes the risk of mismanagement of funds and gives employees responsibility to manage their own investments. An example is a 401k account. Most private businesses in the US switched over to defined contribution as its more sustainable and predictable. As an employee I also prefer defined contribution since my retirement is no longer dependent on the health of an employer a few decades from now.

[SilasX]

Unless, of course, it's the US Postal Service that's offering the pension, in which case HNers jump out of the woodwork to give elaborate justifications of why pre-funding pensions doesn't make sense because "lol it doesn't pay out until later, what's the problem?"

Edit: thread with lots of examples: https://news.ycombinator.com/item?id=10596814

In particular: https://news.ycombinator.com/item?id=10597070

[lordnacho]

The example you're looking for is insurance, where it's an obvious problem. You can't just open an insurance company, take people's premium payments, and then go broke when there's a claim.

But for other companies, normal limited liability bankruptcy is the default solution. Nobody thought coal companies would be a special risk in the sense of having liabilities way after their income. It's like if you invent an ice cream that turns out to give people cancer in 20 years, there's no recourse beyond what money the company has at that time.

[thinkcontext]

Just yesterday I saw:

Nearly 100,000 coal miners at risk of losing pension money by 2022

https://www.daytondailynews.com/news/national-govt--politics...

[Joakal]

Simple solution, provide a bond as condition to start.

But it won't get implemented, why? It would be in many billions because the bond needs to cover clean up costs, etc. Companies want this risk to be borne by government and indirectly, the population/environment.

[adrianN]

If you start out you won't yet have destroyed a lot of land and you won't have many miners. Just require a fixed amount of money as a bond for every ton of coal produced. This could also cover CO2.

[kortilla]

Not really. When coal wasn’t getting crushed by natural gas, cleanup costs for seem mines were easily covered (assuming co2 not priced in as is standard right now).

[wz1000]

This is why limited liability is a terrible idea, just another way to privatize the gains and socialize the losses.

When you buy a stake in a corporation(especially one that comes with voting rights), and the corporation goes on to cause damages to life, property, the environment etc, you should be held personally liable in proportion with your share(or voting share).

I can see the argument for limited liability in case of debts: the issuer of the debt has the opportunity to do due diligence and take the risk of bankruptcy into account. But in the case of damages, I don't see how limited liability can ever be justified.

[pjc50]

We've had limited liability for centuries, and it's completely critical for getting people to invest in businesses. Without it, nobody dares open anything larger than a lemonade stand, unless they're already extremely wealthy.

[atoav]

The only way to prevent the socialization of losses, are good laws and regulations.

Profiting by draining public resources abd values is a special kind of evil.

[Arnt]

Limited liability is crucial to your pension savings. Without that, you would either have to have all your savings in assets that cannot lose value, or you would risk having all of your savings wiped out by losses in any single asset. Considering that, do you still think it's a terrible idea?

[mars4rp]

Let's hold the officers of a company liable first. Then go after shareholders.

[ip26]

It doesn't really seem like that would work out well. Do I get a week in jail because some of my retirement is in VFINX?

[eli_gottlieb]

Easier to just restrict limited liability to enterprises that operate as worker cooperatives or commons trusts. If investors want to limit their liability, that should mean giving other stakeholders the defining voice in corporate governance.

[maxxxxx]

Maybe environmental and retirement liabilities should be treated like student loans so you can't escape from them in bankruptcy?

[onlyrealcuzzo]

Companies shouldn't be allowed to offer pensions. They also should be forced to fund government mandated liabilities.

Companies don't have a good track record of lasting more than 60 years. It's only a matter of time before they go bankrupt. And when bankruptcy is a way of shedding your pension obligations, they'll go out of their way to go bankrupt to shed it.

[xenospn]

And people still say we need less regulations.

[andrei_says_]

Propaganda works. People repeat soundbites drilled into their brains by ceaseless repetition.

[username90]

Actually I think you do. Compare these two systems:

European style welfare: Big government which takes care of people so companies don't have to.

American style welfare: Small government which doesn't take care of people, but lots of regulations on companies forcing them to provide welfare normally provided by government.

[throwayEngineer]

Corporations are one of the worst laws in human history.

Letting people be separate from the company they own has caused a century of irresponsibility.

[jillesvangurp]

If someone ever figures out a class action suit to represent people living near coal plants that are suffering from (or have died from) the side effects of living in a polluted area, it's going to be pretty much game over for the coal industry. At this point they can't really claim ignorance. Bringing this up because class action suits are quite common in the US and have also caused a lot of trouble for e.g. the tobacco industry.

The case for continuing to kill people with smog is pretty weak and cleaning up remaining plants is not going to make operating them any cheaper. It's also a great argument against building more (although entirely redundant considering the economics of coal in general).

[dwaltrip]

Where on the bankruptcy hierarchy of financial obligations do environmental liabilities fall? I would think they should be higher priority than shareholders and debt holders.

[bluGill]

shareholders are generally last. I'm not sure how debt compares though.

[skookumchuck]

The old bankruptcy procedure simply halted operations and sold off the assets. The new procedure allows the company to continue operating under the direction of a judge. A judge, of course, knows nothing about running a business. Worse, it allows the people running the company to strip its assets for their personal gain.

[sitkack]

Capitalism is such a wicked mind.