Advertisement

SunEdison Objection Filed

Advertisement

The U.S. Trustee assigned to the SunEdison case filed with the U.S. Bankruptcy Court an objection to the Debtors’ motion for an order (i) approving implementation of the Company’s non-insider key employee retention plan and (ii) approving implementation of certain sale incentive plans.

The objection asserts, “The United States Trustee objects to the approval of the Motion because the bonus plans do not satisfy the requirements of Section 503(c) of the Bankruptcy Code. The Debtors seek to implement two alleged incentive plans for two admitted insiders and sixty-eight undisclosed employees. The incentive plans, however, fail to disclose the amount of the bonuses to be awarded or the titles of a majority of the award recipients. In addition, the incentive plans do not contain difficult targets to be reached for bonuses to be awarded. Specifically, bonuses are awarded merely upon the sale of assets at the discretion of management. The plans, therefore, appear to be primarily for retentive purposes. As primarily retention plans they cannot be approved unless the Court finds evidence in the record that each insider has a bona fide job offer from another business at the same or greater rate of compensation, the services of the insider are essential to the survival of the business, and the proposed bonus meets certain monetary benchmarks.”

The objection continues, “None of these factors have been addressed by the Debtors. The Motion, with respect to the incentive plans, must therefore be denied. The Debtors also seek to implement a retention plan for 126 alleged non-insiders. With respect to this plan the Debtors fail to meet their burden to establish that the recipients, who admittedly include officers and directors, are not insiders….The Debtors do not provide specific information regarding the job descriptions, the reporting relationships or whether each officer and director they propose to pay under the retention plan was appointed by the Board.”

Read SunEdison bankruptcy news.