> they may choose to use funds belonging to the company (after paying outstanding obligations) to pay severance
If they can do this, they can pay salaries another month. Making a go/no go call at the edge is difficult. It sounds like Convoy thought it was getting a loan that didn’t come through.
Put another way: if the CEO shut down the company while loan negotiations were in place, it would have zeroed out the common stock while giving preferred investors a pay-out (in addition to everyone some severance).
If they can do this, they can pay salaries another month. Making a go/no go call at the edge is difficult. It sounds like Convoy thought it was getting a loan that didn’t come through.
Put another way: if the CEO shut down the company while loan negotiations were in place, it would have zeroed out the common stock while giving preferred investors a pay-out (in addition to everyone some severance).