Creditors are ranked by seniority and get paid out in order by seniority. Equity is below every creditor and has been completely wiped out. Companies are not allowed to take cash or sell the furniture to pay out employees. That money is legally owed to creditors and attempting to stiff them is theft. I'm sorry to those affected at Convoy, but that is the reality of working at a startup that goes through a hasty liquidation. Convoy is not being "cheap" about this, as some are suggesting. Any "retention bonuses" are to keep executives around for long enough to unwind the company in an orderly fashion. Nobody is getting rich off failure; if everyone were to walk away there'd be nothing left and therefore nothing to recover and distribute. It's bad for everyone, but the alternative is worse.

As for the larger situation: Convoy were a digital freight brokerage. They acted as intermediaries between shippers and carriers and make money on the spread between the two. They got into trouble because the entire freight sector has been suffering a double whammy of cost increases due to inflation (ie. diesel costs) and a slowdown in demand. This has caused a number of carriers and brokerages to go bust. Freight brokerage has some other properties that make Convoy's situation particularly serious. In particular, carriers typically securitize their accounts receivable. In freight, this is known as "factoring." Convoy got stuck holding the bag after their partner carriers went under, having already paid them for their service, but still waiting for payment from the shipper.

Worst of all, Convoy had no exits because their only potential acquirers are in the same industry and are also getting completely crushed.

https://usbankruptcycode.org/chapter-5-creditors-the-debtor-...

Wages are fourth priority, but only up to $12,850 per person (one month's salary at ~150k a year).

The three priorities above wages are child support (not really applicable to corporate bankruptcy i assume), liquidator's expenses, and some mildly complex case i don't really understand. Taxes are eighth, two behind grain farmers and fishermen (lol America).

I think that this list might be talking about unsecured claims though. I think that secured claims might be separate. So, for example, if an individual declares bankruptcy and they owe $500k on their house, that claim would come before child support payments. I am definitely not a lawyer and bankruptcy law strikes me as particularly complex.

The third priority is tough to parse. From looking over it quickly, it seems like this might be claims from doing business between when i file bankruptcy and when i go into foreclosure. Again, not a lawyer, but my guess here is that if I'm a store and I file bankruptcy on Monday, but don't have a trustee until Wednesday, and I put in an order for a palette of water bottles on Tuesday, then the distributor of the water bottles might have a priority claim.

But yes this grandparent post is mostly correct. If severance was not built in to any loan contact (it never is). Then creditors are paid first.

It would be interesting to know how much debt they have vs remaining cash and when did it dip below.

Paying severance is extremely low probably even below equity since there's no legal requirement to pay severance.

[Edit] Legally how is it. Not just because it's commonly measured in months of wages

They look really similar, but legally entirely different.

In "gardening leave" you're still an employee and on payroll until the last day. Whereas severance you're not an employee and typically paid lump-sum (but doesn't matter for this discussion). So in this specific situation, yes, that would be wages and would be paid out first before creditors because you are _legally_ entitled to those wages.

The problem of course you cannot hope to put a whole company on "gardening leave" in hopes that it can "act as severance" for everyone. Your creditors will sue you and easily win. They'd probably put an emergency injunction on the company and remaining funds before the first month was even completed once they learned of "creditors hate this one little trick!"

[0] https://en.wikipedia.org/wiki/Garden_leave

You have X months notice ie the company has to tell you X months before yoir severance date.

Often the company will want somone they let go out of the office ASAP. Thus you spend your X months on gardening leave paid as normal wages.

On your severance date you get your redundancy package - in the UK there is a defined minimum but in some markets e.g. finance they pay more as they do want to keep current employees happy so they see that they just don't get thrown out.

As much of the US is at will employment I doubt this scenario will occur often

Way more commonly, severance is part of a termination contract, and thus it would not be here.

[0] https://www.dol.gov/general/topic/wages/severancepay

Are you European? Maybe it's different there.

My assumption was that we would not be talking about "unpaid severance" if there was no severance defined in the first place.

> Are you European? Maybe it's different there.

Generally severance is not legally mandated, but can be mandated under some specific circumstances, e.g. no-notice termination. Usually it is similar to US: either defined in collective (union) agreement or part of termination contract.

Usually severance is consideration for agreeing not to sue the company, not taking trade secrets, etc.

IDK if Shone did things the most intelligent way, but the general story is not uncommon.

Shareholders/creditors have a mess if the CEO and CFO walk out the door for their new job; it is financially beneficial for them to liquidate assets and shut the door.

Shareholders/creditors don't have a mess when the engineer and a product manager walk out the door to their new job.

That's how the logic works.

Cooperation of board/executives is not required but it is immensely helpful.

"The easy way" vs "the hard way."

Bank accounts, contacts, loans, real estate, equipment, IP, etc.

For a (once) multi-billion 1500-employee logistics business, it's more involved than you give credit for.

If your CEO is looking at records of individual office chairs when unwinding a billion dollar company someone has seriously fucked up. They don’t and shouldn’t know the details by memory.

However, the details are either available so everyone ‘knows’ them as soon as they become relevant, or the executive officers have been committing serious financial crimes.

If a regular individual declares bankruptcy and then doesn't bother doing any of the required paperwork and legal stuff, saying the court needs to pay them top dollar for their time, things will not go well for them.

On moral side: business in general (and startups especially) requires navigation between things many of which are unpredictable, and plenty are beyond your control. Also I've seen startups failing because of software bugs, and technical limitations. In this particular case, do you know about any obvious wrongdoing? If not you probably shouldn't auto-assigning blame on "them".

Because we decided ages ago that compelled labor is a bad idea.

To be real, if the executives at a company do commit crimes that lead to the failure of the company, I think they should be on the hook for that.

Yes, e.g. Theranos.

But the majority of failed businesses fail for reasons that have nothing to do with crime.

In fact, bankruptcy is a process that, if you follow the rules, is beneficial to you: you get protection from your creditors so that your loss is minimized. If you refuse to do the labor to follow this process, you won't have any protection and things will go badly for you. I don't see why it should be different for the owners and executives of a corporation. These people are not employees.

Many companies are open with employees about the state of the business.

If you have less than 3 months runway and little prospect of any fundraising, tell your employees. You don’t need to steal money from creditors (?) to pay severance, you just gotta do your best to not blindside people who have rent to pay.

Some great insights here and you clearly know the business. I’m curious about this last statement however. Just how badly are other players doing?

Uber Freight just announced a major overhaul on a foundation apparently provided by their acquisition of Transplace [1]. There seem to be a number of synergies between Convoy and Uber Freight although I may be naive about that. In any case, I’m curious about your view on Uber Freight and whether they are viable or simply playing the long game based on deep capital reserves, and why you think they didn’t acquire Convoy (if that even makes sense as a possibility).

1: https://www.freightwaves.com/news/uber-freights-new-solution...

Unfortunately I had to learn this the hard way (as in I was lied to and assumed they were still going to pay us, and then the payroll money went poof)

Why should employees be prioritized below a property speculator?

Correct.

I can only assume "companies are not allowed to pay out employees" refers to suggestions of severance, health care, etc. in this thread.

Not earned wages, which have high legal priority.

normally piercing the corporate veil requires serious executive misconduct.

> The case therefore would up presenting a clear question of law: Where the workers are employed by a corporation, can an individual be held liable for penalties associated with statutory violations in the payment of wages where there was no allegation or finding that the corporate laws had been misused or abused for a wrongful or inequitable purpose? In other words, do sections 558 and 1197.1 allow workers to recover civil penalties for nonpayment of wages from individuals even when there are no other grounds for piercing the corporate veil under the doctrine of alter ego?

> The court of appeal concluded that under the clear language of sections 558 and 1197.1, the State of California, through the Labor and Workforce Development Agency (“LWDA”), can recover penalties associated with unpaid wages from individuals. Furthermore, PAGA allows employees to stand in the shoes of the LWDA and recover those penalties. Accordingly, employees are also permitted to recover those penalties from individuals.

https://hunterpylelaw.com/2021/02/individual-liability-for-w...

See also the actual decision:

https://law.justia.com/cases/california/court-of-appeal/2018...

The only ambiguity to me in reading this is whether the court considered it different because the wages went unpaid for a while before bankruptcy.

This is my entire point.

If you go into chapter 7 bankruptcy, and a judge prioritizes senior creditors above unpaid wadges, you are clearly in different territory than if the corporation was neglecting wages before bankruptcy.

Everyone keeps linking cases for pre-bankruptcy cases, or ones without bankruptcy at all.

Meanwhile, There laws on the books about the prioritization or creditors, and where labors stands, and how much labor gets paid out before, and how much after other creditors.

> That is what happened to plaintiff Brett Voris (“Voris”) in Voris v. Lampert.

https://www.gmsr.com/wp-content/uploads/2021/07/Kuang-Too-Ma...

...which is the same case I linked above. So the whole issue is how long wages can be delayed. If you're arguing that "Convoy management is unlikely to be personally liable assuming they didn't delay any wage payments whatsoever and their wage payment intervals are found to be reasonable by the court", then I agree. But it's rather common for some of these conditions to not hold, so the potential for piercing the veil is very real.

(Perhaps you are arguing against other people who think that unpaid wages are always considered theft, in which case I would agree with you. I was respondsing to the comment "you cant prosecute a dead entity for theft"; often you can, and it depends on the details, which I presume are not yet public for Convoy.)

This is exactly what I am auguring. Convoy isnt even delaying any wage payments. They are not paying severance or providing transition healthcare/COBRA.

It seems like Voris v. Lampert case had a much longer delay, and the court still decided against the the plaintiff.

I did learn that there is more case law on piercing the vale for wage than I realized, but everything I read still suggests that a legitimate bankruptcy without serious/illegal executive misconduct will not lead to piercing of the veil.

a probably relevant article: https://www.severino-law.com/blog/oqz4dx2ivdnzt7aqqrvbk9et11...

Going through a perfectly legal bankruptcy procedure is very different than working your severs 72 hours a week for years without overtime then refusing to show up at court.

This comports with my understanding that piercing the veil usually requires illegal behavior.

>Because claims for unpaid wages due to insolvency do not fall under the Fair Labor Standards Act (FLSA) unless the employer willfully failed to pay wages owed and filed for bankruptcy as an attempt to avoid paying wages, the U.S. Department of Labor has no jurisdiction in this area and will not accept claims.

https://www.shrm.org/resourcesandtools/tools-and-samples/hr-...

You really don't seem to. The allowed recourse, under contention, for unpaid wages due to bankruptcy isn't via the FLSA, its a lawsuit against the company's owners. If you run a taco stand, don't pay your employee, and then declare bankrupcy - validly or not - you will plausibly be held liable, as person, not an LLC, in civil court for those wages. To be paid from your personal assets and or garnished from future income.

Also your quote literally says 'unless declaring bankruptcy to avoid paying wages.'

I am not talking about the case of of declaring bankruptcy to avoid paying wages.

Unless, of course, Convoy had to because all their carriers insisted on upfront payments for reasons. In which case Convoy was propably already screwed any way.

"Nobody is getting rich off failure; if everyone were to walk away there'd be nothing left and therefore nothing to recover and distribute. It's bad for everyone, but the alternative is worse."

Here's one such game. Executives, who enjoy information asymetry, and leverage can parlay this into one final earning event. Threaten to leave the company in disarray, unless they're paid. Coordinated, it's hard to say no to.

Imagine if the top 5-10 execs at an otherwise ok startup coordinated a demand to double their pay/stock or everyone walks tomorrow. They time the move using inside knowledge of cash flow, making the demand irresistible.

I'm not suggesting an alternative, but that doesn't mean a corpse isnt a feast for some.

It should work that way everywhere. Executives need to be incentivized to do layoffs while there’s still cash for it. Defrauding employees is a terrible evil.

Most (good) employers do that when employees quit but they don’t have to.

Could you help me understand where the line is drawn?

The US staff had to just go. I got my last month's pay + about 6 to 8 weeks.

Yes, what happens in an acquisition vs a insolvency are different.

Detailed the shutdown on a call at 8:30am Pacific this morning. CEO said there'll be no severance or healthcare.

Lot of talented folks in Seattle and beyond who'll be looking for new gigs.

When NCC Group fired me, they gave me zero days notice and no severance.

They did emphasize that my healthcare would stay good through the end of the month, but they didn't seem to have realized that I would be unlikely to find that useful after being fired on October 31.

I would hope most employees know that is a significant risk of working at a startup?!

But yes, harsh, regardless of how predictable.

Also, healthcare shouldn't be employer provided.

Running concern businesses don't have quite the same incentives nor the same risks of failure.

"Convoy, which raised $260 million in a funding round last year that valued the business at $3.8 billion, on Wednesday told employees in an email that it would stop accepting shipments until further notice and that it was rescheduling or canceling existing loads." (wsj)

Price per shipment cratered -> Revenue cratered. (They make a % of each shipment) -> Losses spiked up. (Because they had fixed cost)

Flexport had a burn run rate of $600M a year. Convoy had less burn but also less in the bank.

https://www.theinformation.com/briefings/flexport-revenue-dr...

"No idea at all!"

No one else thought it important to try and get developers using our product to reduce our reliance on big players and well, here we are. My last check was paid out from the CEO's personal bank account.

Certain spaces are exciting to work in because you can clearly see a need but sometimes the stars don't align for you. I hope the Convoy team (sans leadership) lands on their feet. Q4 is the worst time to find jobs.

Was it largely spot rates, a bid board, and lots of small carriers?

Customers easily could just get rates / carriers elsewhere and walk from Convoy?

No other services making income keeping customers around?

Rates are pretty fluid in logistics, very strange that they would rely on that alone if that was the case.

Convoy could interface with large companies as though they had a large fleet of drivers and trucks. That "fleet" wouldn't require paying for benefits to employees, maintenance or fuel on the truck, and could scale up or down based on demand.

I would have guessed that the network effects of getting this kind of marketplace going would be the hard part. It makes me think that a big mistake in leadership was made.

Don't these sentences tend to contradict each other? What do you mean by "saturated"?

The logistics industry is really old, backwards at times, and lots of penny pinches.

But supply and demand for carriers and capacity is pretty dang fluid too... market forces are already REALLY at play in logistics lands.

If covid showed anything it was that while there would be hiccups if people can't get to work ... stuff still flows through the system pretty efficiently.

If you want to be a 3PL you gotta manage your relationships with your customers / give them a reason to stick with you.

Just not enough to offer any severance or healthcare. #TruckYeah!

(have co-owned a business where we made folks whole for pay the owner skipped out on during the failure, asset acquisition, and their onboarding with us; plan ahead and you can do the right thing, fail to plan and people will experience pain; you're not saving the business while burning through the severance allocation, you're just lying to yourself that the business isn't already dead)

What am I going to do with one more year of pay. Absolute pittance. People who are going to do this should be upfront that they are ball-less.

Given Convoy's margins and operational leverage, I'm not sure it was this simple. Legacy freight brokers who have been doing this a long time are being caught surprised. They may have thought they had months of runway that rapidly collapsed to weeks.

We need stronger unemployment benefits. Barring a public solution, severance ensconced in employment contracts is next best. Convoy had nine figures of debt. Depending on the covenants, it may not have been able to hadn't over cash at windows to employees in the form of a novel severance package.

There's at least one major US freight forwarder who has been in business for over 40 years and who has never done a layoff, not in 2008, not in COVID, and not now. They're not perfect and have other flaws (like every other company everywhere), but still.

So it's a (common) choice. They are balancing the +/- against other uses of the last bits of cash. To some degree they do it because the employee pool accepts and expects it, no better reason. If the representational damage was more acute, they might choose someone else to disappoint.

The more common problem is a "hail mary" play, where the management team is perhaps fooling themselves about the probability of success.

I think the ethical thing to do there is discuss it with employees, but that's just me.

https://www.google.com/amp/s/www.businessinsider.com/fedex-s...

If you look only at people who won the lottery, you'd have to be an idiot not to spend all your money on lottery tickets. How many times has someone done this and lost all their money, screwed over thousands of people, and never been heard of again? We don't know, because they aren't famous, but my suspicion is it's a much more common outcome.

What if they did and lost it all 6 weeks ago? What would that signal instead?

FedEx was already shafting their pilots for months before this. Bounced paychecks, pilots paying for jet fuel on personal credit cards, and more.

If I was a pilot there, I'd have said "Fuck you, Fred", even though he won. How sociopathic do you have to be to gamble company money (sorry, isn't that a felony?) while bouncing paychecks?

And yet you'll still have people here applauding your hustler mentality, apparently.

This is bad.

> How sociopathic do you have to be to gamble company money (sorry, isn't that a felony?) while bouncing paychecks?

It sounds like he was about to bounce a lot more paychecks. Going all or nothing instead isn't something I would call sociopathic. What makes you call it that?

Normally "gambling company money" implies embezzlement, which is not what happened here.

Huh, what?

"In one instance, after a crucial business loan was denied, he took the company's last $5,000 to Las Vegas and won $27,000 gambling on blackjack to cover the company's $24,000 fuel bill."

"Embezzlement is the fraudulent taking of property by someone to whom it was entrusted, usually involving theft from a business or employer."

I mean I suppose you could try to make some argument that it was an officially sanctioned company act, but that's definitely some post facto rationalization.

"’The meeting with the General Dynamics board was a bust and I knew we needed money for Monday, so I took a plane to Las Vegas and won $27,000.’ I said, ‘You mean you took our last $5,000-- how could you do that?’ He shrugged his shoulders"

Sounds both unsanctioned and sociopathic to me.

And not Fred's first or last brush with financial malfeasance, indicted for forgery over a $2 million loan from his family's trust fund.

I'm inclined to think 'selfish' much more than 'plucky startup founder'.

This is not embezzlement. It's reckless, not theft.

> Sounds both unsanctioned and sociopathic to me.

Very unsanctioned, but I don't see how you get sociopathic from that quote.

Please explain what's sociopathic about it like I'm stupid.

The lack of funding is already there. This act shifts the odds but doesn't really make them worse. And if the company doesn't run out of money that seems like a good thing.

The first quote I saw here was that payroll was going to fail if he didn't do this. I don't think a guarantee of only paying half the employees is better than a 50% chance of paying everyone or paying no one, for example.

If this wasn't affecting payroll then sociopathy is even less of a worry.

Only if this was going to risk payroll with no benefit to payroll do I see a serious moral issue.

He took company funds and gambled them. That he won and was able to replace them is immaterial. Martin Shkreli was convicted for misusing company funds even though he made his investors money. It's not "not theft" because you can or do put the money back.

I can't understand how you can't see that.

That $5,000 ($40,000 in today's money) might not have gone very far, but you are very eager to whitewash it because he ended up winning on his gamble, and FedEx has gone on to success. He easily could have lost that bet, and that money could have reimbursed credit card bills for his employees. How that isn't reckless and malfeasance, I don't understand. "We're screwed. I can use the last of this money to try to do something right, or fuck it, I'm going to Vegas!" isn't leadership.

And Shkreli was moving money between companies and lying to investors, neither of which is relevant here.

More importantly, none of that explains what is sociopathic here.

> He easily could have lost that bet, and that money could have reimbursed credit card bills for his employees.

But would it have been used that way? Or would it have kept propping the company up for a bit longer until total collapse?

> How that isn't reckless and malfeasance, I don't understand. "We're screwed. I can use the last of this money to try to do something right, or fuck it, I'm going to Vegas!" isn't leadership.

I never said it wasn't reckless. But he got the business out of being screwed. If he failed, the business would have gone from screwed to... also screwed. What "do something right" do you have in mind that was so important it becomes sociopathic if he doesn't do it? And it has to be something that would have happened if he didn't gamble, but wouldn't have happened if he lost.

In other words, if your claim is right then there has to be a big human-impacting difference between the "he does nothing" outcome and the "he loses the gamble" outcome. And I'm not really seeing that difference. If both scenarios involve total shutdown and the only difference is a few days, that ain't it.

That's an extremely short horizon. Normally it's more than a quarter out, at least.

That should be illegal.

How much are the executives making from this?

I'm really sorry you're in the middle of this. I hope you can find a better job soon.

Accrue the money, bankrupt one month earlier. Pay the money.

Of course this means companies think twice before hiring anyone.

So yeah, if one thinks this is wrong, they need to take it up with their lawmakers. This is not something private companies can change on their own, otherwise all the well behaved companies would be much more likely to go out of business and only the poorly behaved ones would remain.

They used to have 1,500, before they laid off 1,000 of them.

It may not be that clear cut ...

From the article: The startup, valued by investors last year at $3.8 billion, had already whittled its staff down to about 500 people from a peak of 1,500, and was on track to run out of money in a matter of weeks

If there are any outstanding debt obligations (which I expect there are), then those would be senior to voluntary severance even if the company hadn't spent its literal last dollar.

I appreciate you were focused on the exec compensation part of the dialogue. Just noting that the money was not yet all gone.

As such, spending your last cent to try to find a lifeline makes far more sense than calling it quits early. It's also certainly not in the interests of investors to just call things off.

Convoy knows their situation very well, and it hasn't changed for 6 months.

As investors and founders you can make the call and be responsible to your employees, maintaining a good reputation for yourself (as founders), and enabling future deal flow (as investors) or this situation where they get 0 help transitioning.

This wasn't an early stage company. They're a late stage (series D iirc?) company that was valued at 1 billion+ with 5000 employees. It's not fair to characterize this with the same risk profile as an early stage co., and the expectations here should be higher in terms of severance and help.

And of course, we should prioritize a class of people who BY DEFINITION have significantly more resources available to keep themselves alive and safe and happy over the well being of 500 normal people.

Indeed.

"We hoped this day would never come. We spent over 4 months exhausting all viable strategic options for the business."

If the CEO was still speaking for the company then he's being paid.

If it's not certain they are getting paid even while things are still working, how can you say he is getting paid after running out of money? Unless you mean "paid with worthless stock" in which case I would say "you can't fund severance and health care with worthless stock."

Because the executives (almost) always make sure that they are compensated before the fall.

Often after having forgone salary for a while, also.

If there are no more company operations and no current employees, there is also no plan and no COBRA.

This could also be an issue if a company restructured so it didn't have to offer employees health care because of size or everyone being part time or whatever: COBRA doesn't guarantee that there is a plan from your former employer, it just gives you a right to pay for it yourself if there is, for a certain period of time.

So 46 days of gap between job 1 and job 2? Don't get cobra, just tough it out. If medical bills are >= 3k, then go ahead and sign up for cobra and get a chunk covered.

If your employer was paying $3,000/mo for your insurance, it's going to be $3,060 for you.

Fuck whichever lobbyists made sure that was allowable.

Edit: corrected per the reply.

It's not mandatory and its capped at 2%, not 5%, but, yes, there is a potential additional charge beyond just the full cost (what would be the employer + employee share, for a current employee) of coverage.

Also, COBRA and medical insurance in general used to be a much smaller fraction of middle-class take home pay, so it was a lot more realistic to elect to pay it out of savings even if you weren't concerned about all the above.

Medicaid and CHIP: 85,614,581 people enrolled [1]

Military: 9.5 million people covered [2]

The US has not one but two of the largest single payer health insurance programs in the world.

Medicare alone has more people enrolled than any European country's single payer programs other than Germany (pop 83,294,633) and the UK (pop 67,736,802).

[0] https://medicareadvocacy.org/medicare-enrollment-numbers/ [1] https://www.medicaid.gov/medicaid/program-information/medica... [2] https://www.health.mil/Military-Health-Topics/MHS-Toolkits/M...

Neither Medicare as a whole nor Medicaid is single-payer. (Individual state Medicaid plans may be single payer plans, but very often they aren't, either.)

Traditional Medicare is single-payer, but the majority (as of this year) of Medicare beneficiaries use partially-subsidized private insurance (Medicare Advantage) plans, not traditional Medicare.

As they said, it is bizarre the lengths the US will go to to maintain its layered system. It seems purpose built to screw people over.

If you have an example of a country with a single program that has more effective outcomes for a population of similar makeup and size, that would be a useful comparison.

With multiple “single-payer” systems in the same population (often serving overlapping populations with each other and private health insurance) you've negated that benefit.

You’ve also negated the market power advantage of monopsony purchasing by having multiple of them, and again having them coexist with private health insurance.

(And that's even before considering that while Medicare and some state Medicaid plans have single payer components, Medicare is not a single-payer plan covering the listed number of beneficiaries, but instead just under half are in the single-payer traditional Medicare, and that Medicaid isn't a single payer plan, or even a plan, at all, its a funding mechanism for state-operated plans, each of which may or may not operate entirely as a state-level single-payer plan.)

Turkey's system used to have that exact flaw (three single-payers, to be precise) until 2008. All merged thereafter.

Re: medicare, I think a reasonable way towards universal single payer (or whatever you call medicare advantage plans, as a sibling notes) would be to drop the eligibility age over many years, and eventually get full coverage; and at the same time, add all kids to medicaid. Ex: years 1-10, reduce medicare eligibity age by 1, have medicaid cover kids less than year number; after ten years, medicare covers you at 55, medicaid covers kids less than 10. Years 11-20, reduce medicare eligibity age by 2, still increase kids by one year per year; after twenty years, medicare covers you at 35, and medicaid covers until 18. Years 21-28?, add medicare one year from both ends, and I think at year 28, everyone is covered. Congress should adjust the rollout schedule regularly, as scaling problems emerge, or don't; if after a couple years it becomes obvious that it's too slow or too fast, it can be adjusted; it'd also work, but be more complicated, to do it on a % basis --- once a year, determine what age (years + months even?) would result in a 1% enrollment increase, and do that, you'll finish before 100 years, but I'm not doing the math to figure out how much sooner.

When a business close, if there is no money to pay the insurance company, the plan will be terminated by the insurance company, and correct, there will be no COBRA. Bad situation.

…if the company still exists (see comments above and below)

Classy. Learning a lot about how certain people treat their employees during these last couple of admittedly insane years. Good for future reference, I guess - though not much solace now. I feel for the employees.

Edit: Wow, more responses than I thought! I admit that the tone of my comment was too reactionary, but my opinion stands. I won't modify the original comment but instead will add this quote from Dalton Caldwell, YC Partner:

"So what happens if you have less than three months of cash? It's important to face the issue head on and account for your liabilities and the scenario of shutting down your company.

In many cases,

Convoy raised $1.1b including a $260mm Series E almost exactly a year ago.

[1] https://www.ycombinator.com/library/3Z-advice-for-companies-...

This might be true, but personally I'd rather the company try to remain a going concern.