Norfolk Southern is paying $6.5M to derailment victims,$7.5B for shareholders | Hacker News Reader

Norfolk Southern is paying $6.5M to derailment victims,$7.5B for shareholders

cnn.com

68 pointsgbenga4real14 comments

$6.5M from the company on top of “as much as $1.1 billion worth of liability insurance coverage that it can draw upon to compensate third parties for losses caused by the accident.”

That seems like a buried lede to me.

Their liability insurance coverage might be insufficient to remediate the environmental disaster their operating policies contributed to, so they should be prevented from distributing returns to shareholders until the full scope of cleanup costs is determined. Otherwise, taxpayers could be footing the bill while shareholders reap the gains.

When this occurs in bankruptcy, this is the concept of “fraudulent conveyance.”

They should have to put up a huge, long term, refundable bond that can be drawn on to remediate environmental damage for the next several decades.

There are 100+ year old gold mines in northern Canada that are an environmental problem and the companies (and super wealthy families) that benefited are long gone. We should switch to a model that assumes the rich are externalizing long term costs and collect money from them upfront to pay for those costs.

That'd cost shareholders potential revenue. There's no chance of any action that isn't prying it from the hands of those in charge of the company's bottom line

So what you're saying is, if we want to protect the environment, giving veto power to shareholders regarding the scope of remediation plans is a bad idea.

Consider how many people will be unable to perform valuable (economy-driving) outcomes as a result of the injuries to their bodies and to the lands where they work and play -- surely more opportunity cost borne by the national economy than one company paying out damages and/or getting folded into a nationalized governance and ownership scheme.

Investments are risks. Sometimes you gotta take the fall to keep from delegitimizing the entire system on which your sustenance depends.

There actually is precedence to this, albeit not in transportation. If you own a superfund site, the owner or operator of each facility must establish financial assurance for closure of the facility. Many times that assurance comes in the form of a surety bond.

Here's a link to a random website that I have no dealings or affiliation -> https://suretybondsagency.com/surety-bonds/contract-bonds/en...

You just described the entirety of the US coal mining business. The wealthy families who owned these companies have massively benefited, but the state and federal governments are now paying entirely for the reclamation and cleanup of their mine sites.

Privatize profits, socialize costs.

Feels like the process used to write this article was “find a small dollar number related to the derailment and put it next to a big dollar number that isn’t related to the derailment”. Your average viral twitter dunk has more thought than this.

The reason they’re related is that the company reduces cost (remove costly safety equipment, personnel, routines) to increase value to shareholders. If it doesn’t cost very much to do that (7mil), but the gains are very large (7bil), we’ll keep seeing these types of accidents

Oh, come on, you're being willfully ignorant if you believe there is no relation between the two.

Sure, the buyback plans were made before the derailment, but the fact that plans haven't change shows how little they care about the victims versus their profits.

Even ignoring individual blame, there is the question whether as a society we should allow corporations in general to distribute huge sums of money to their shareholders after a fiscally-significant incident like this. Victims will require compensation, probably for decades. If the company reorganizes or folds in bankruptcy -- which seems somewhat likely -- we the taxpayers will be stuck holding the bag.

Why would they change their buyback plans in response to an accident that was already priced into their insurance? Handling the accident isn’t going to deplete their 1.1bn insurance policy. This 7m amount is just one of many payments they’ll be making in regards to the derailment.

> Handling the accident isn’t going to deplete their 1.1bn insurance policy.

Sure. But maybe $1.1b won't be enough. Postpone the buyback, just in case.

A Brutal truth. A clear priority of this corporation, shown by its financial behavior.

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