Upon taking another $20 Billion in Federal Taxpayer Funds, making a total taken of $45 Billion in Federal Taxpayer Funds as of New Year's Eve 2008, Citigroup's CEO sent a memo to employees announcing the growing bailout and also announcing that some Citigroup "executives" will be working under contracts that contain so-called "clawback provisions". Serena Saitto, "Citigroup CEO Pandit, Chairman Bischoff Forgo Bonuses (Update 2)" (Bloomberg.com, Wed., December 31, 2008). (Background: There are many press releases to be found online at the Citi site. This "memo to employees on New Year's Eve" was not found among them in an extensive search of Citigroup press releases. Query: Why announce this instead in a "memo to employees"?)
The exact kind of "clawback" provision mentioned in Citigroup's CEO's memo to employees is just not clear. There are at least four (4) kinds, and which one or perhaps a fifth kind, is the one mentioned in the Citgroup CEO memo remains to be determined. See generally "Clawback Provisions Soar" (Treasury & Risk July-August 2008 at www.treasuryandrisk.com (summarizing four [4] kinds of provisions, each called a "clawback," listed in a Corporate Library Survey at that time).
An in-depth post exploring these kinds of contractual provisions, and their role in the formation of Fiduciary Duties allowing recoupment of monies previously paid either as a result of Contract Breach or Breach of Fiduciary Duties, is found at www.insuranceclaimsbadfaith.typepad.com.
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