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Sports Authority plans to pay executives $2.85M in bankruptcy bonuses (Up: Rejected)

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D

Dalek

Member
Sports Authority plans to pay top executives $2.85 million in bankruptcy bonuses

Sports Authority’s creditors and the Justice Department have challenged the fading retailer’s plans to pay top executives as much as $2.85 million in bankruptcy bonuses.

Once an operator of 460 athletic-gear outlets, Sports Authority filed for bankruptcy protection and began going-out-of-business sales in an effort to pay its debts. As the liquidation entered its final weeks, Sports Authority unveiled plans for bonuses to four top executives, people the company doesn’t want to name.
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On Tuesday, U.S. Trustee Andrew Vara, a Justice Department bankruptcy watchdog, and lawyers for the official committee of unsecured creditors protested the bonuses and the secrecy surrounding the rewards to top executives.“The debtors are seeking to allow payment of compensation, outside of the ordinary course of business, of a substantial amount of money, to a very few, select, insider executives,” Mr. Vara’s lawyer wrote.

A Sports Authority spokeswoman couldn’t immediately be reached for comment on the objections, which came in advance of a court hearing where a judge will consider whether to approve the bonuses.

The bonus money is needed to encourage the executives to do their best in the company’s final days, according to Sports Authority’s lawyers. Confidentiality is appropriate to protect morale, and prevent competitors from using the pay data to lure Sports Authority’s leaders away, the company contends.

The arguments don’t hold water, critics of the bonus program say. Sports Authority is almost completely liquidated, and with many other retailers also in bankruptcy it “strains credulity” to argue the nearly defunct company is surrendering a competitive advantage by releasing executive pay details, the lawyers wrote.

Unsecured creditors called Sports Authority’s argument about the need to protect morale “ridiculous.”
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The creditors committee said hiding the names is the equivalent of hiding the entire bonus program. According to creditors, the millions of dollars of bonuses aren’t incentives for performance. Instead, the creditors say, they appear “to be simply a quid pro quo” for Sports Authority’s agreement to a deal that gives senior lenders $71 million of the company’s scant remaining cash.
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D

dave is ok

aztek is ok
The trustee would have to allow this, wouldn't they?

I can't imagine they'd give such a big 'fuck you' to the creditors
 
L

liquidtmd

Banned
The bonus money is needed to encourage the executives to do their best in the company’s final days, according to Sports Authority’s lawyers.
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"Do your best otherwise the company is FUCKE...oh"
 
O

Ovid

Member
Wasn't there a GAFer that worked at SA?

I wonder what he thinks about this?

EDIT: Yeah, Jason get in here.
 
R

rrs

Member
Krakn3Dfx said:
"Bankruptcy bonuses"

Amazing how corporate America works anymore. Disgusting.
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it could just be the execs signing their own checks, or to prevent said execs from walking off and grabbing a new job elsewhere. Also, a lot of execs getting fat checks for doing anything is to counter corporate raiding for profits by "activist shareholders"
 
S

SwiftDeath

Member
The bonus money is needed to encourage the executives to do their best in the company’s final days, according to Sports Authority’s lawyers. Confidentiality is appropriate to protect morale, and prevent competitors from using the pay data to lure Sports Authority’s leaders away, the company contends.
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This is amazing
 
N

Nirolak

Mrgrgr
I'd be surprised if the court favors the smaller, bankrupt corporation over the bigger, still alive corporations.
 
R

ReAxion

Member
Why'd you wanna become a lender to Sports Authority tho. You thought there was an ROI there? Change the name from bankruptcy bonus to stupid tax.
 
T

therealist

Member
Well these executives have probably lost a substantial amount of their money and past compensation since they don't get paid in dollars, they get paid in stock of the company that is now worth zero. This 2.85 million might be a small price to pay in exchange for losing the last 3+ years of your compensation.
 
D

Dalek

Member
Bankruptcy Judge In Sports Authority Case Rejects Bonuses For Executives

U.S. Bankruptcy Court judge Mary Walrath may be a new folk hero. She’s the judge handling the Sports Authority case, and today she ruled that four Sports Authority executives will not receive a combined $2.85 million in bonuses that the company claims are incentives. Incentives for running the company into the ground?

Sports Authority couldn’t find a buyer for its stores in bankruptcy, and 14,000 people across the country have lost their jobs as the chain concludes its going out of business sales and finally closes down. Some of those people have apparently contacted the bankruptcy court, and Judge Walrath wants them to know that she got the message.

“Quite frankly, I’m not surprised the employees are sending angry emails,” she told the court during a hearing today. The argument in favor of the bonuses was that the payments were incentive payments coming from the lenders.

One of those incentives was to keep “shrinkage” down, or make sure that employees and shoplifters didn’t make off with the liquidation merchandise. Isn’t that the store managers’ job? Maybe they should have split the $2.85 million instead.

Judge Walrath wasn’t having it, following a trend in bankruptcy court of not granting big bonuses to executives. “I think it’s just inappropriate to pay senior executives bonuses when all the employees are losing their jobs,” she said during the hearing.
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K

Kayhan

Member
The bonus money is needed to encourage the executives to do their best in the company’s final days, according to Sports Authority’s lawyers.
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That is what their regular pay is for for fucks sake.
 
Slayer-33

Slayer-33

Liverpool-2
screenshot_2016-08-02llslc.png
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Heuheuheuheuheu
 
M

MegaManTrigger

Banned
A U.S. bankruptcy judge refused on Tuesday to allow Sports Authority to pay up to $2.85 million in bonuses to four executives for overseeing the winding down of the national sporting goods chain.

Englewood, Colorado-based Sports Authority filed for bankruptcy in March with hopes of keeping some of its 464 stores open, but battles among lenders and suppliers eventually scuttled those plans. Its final stores closed last month.

"I think it’s just inappropriate to pay senior executives a bonus when all the employees are losing their jobs," said Judge Mary Walrath during a hearing in Wilmington, Delaware.

Sports Authority said the bonuses were essential to ensure executives squeeze the most value out of its assets by adhering to a budget and preventing waste.

The company asked to keep the identities of the executives under seal to "minimize detrimental impacts on employee morale," which prompted an outcry from some of the 14,000 former staffers.

"I’m not surprised the employees are sending angry emails about it," said Walrath.
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Source: http://www.reuters.com/article/us-sportsauthority-bankruptcy-idUSKCN10D214
 
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