Here’s a telling story from July about Hostess Brands, which at the time was in a Chapter 11 organization process and now is shutting down and undergoing Chapter 7 liquidation. The key protagonist is Brian Driscoll, the CEO who led the company into Chapter 11 in the first place:
Even as it played the numbers game, Hostess had to face chaos in the corner office at the worst possible time. Driscoll, the CEO, departed suddenly and without explanation in March. It may have been that the Teamsters no longer felt it could trust him. In early February, Hostess had asked the bankruptcy judge to approve a sweet new employment deal for Driscoll. Its terms guaranteed him a base annual salary of $1.5 million, plus cash incentives and “long-term incentive” compensation of up to $2 million. If Hostess liquidated or Driscoll were fired without cause, he’d still get severance pay of $1.95 million as long as he honored a noncompete agreement.
This is not identical to the story with the American Airlines bankruptcy, but there’s something similar about it. There the CEO gets a large payday if he can avoid a merger, regardless of the value for the enterprise.