ALCO Stores’ official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtor’s motion for an order authorizing and approving the performance based incentives for key employees. The objection explains, “Barely one month before the filing of these cases, the new board appointed Stanley B. Latacha (‘Latacha’), who had no prior experience with the Debtors or their business, as interim CEO of the Debtors. Latacha was provided a substantial salary and, upon information and belief, the primary objective of assisting the Debtors in their efforts to identify a going concern purchaser and, ultimately, becoming CEO of the going concern, post-purchase ALCO. Latacha has therefore, even without the Bonus Plan, been meaningfully incentivized throughout the going concern sale process with the prospect of future employment with post-sale ALCO and a substantial salary….Under the Bonus Plan, Latacha would receive up to $95,000, partially payable immediately upon approval of the Motion and subsequently payable upon the accomplishment of self-executing and easily achievable sales metrics…the Committee believes Latacha’s services are no longer required at all. The Committee would prefer to see Latacha’s employment terminated immediately over the approval of any bonus payment….In the wake of the failed going concern process – wherein the primary potential going concern purchaser ended up being comprised of members of the board itself – excessive payments to an interim CEO (who, upon information and belief, has been mostly absent since the conclusion of the unsuccessful going concern sale process) is an unjustifiable waste of estate resources.” Allegro Media Group also filed a separate objection to the Debtors’ KEIP motion.
About Brandy Chetsas
Brandy L. Chetsas is editor in chief at Bankrupt Company News. She joined New Generation Research, Inc. in 1998. As Director of Strategic Content, she leverages 20+ years of communications and project management experience for the distressed investing sector--with particular expertise on corporate restructurings via Chapter 11. Brandy began her career writing for a law enforcement-related publication and teaching English courses at numerous colleges in the U.S. and abroad.