Violin Memory filed with the U.S. Bankruptcy Court a motion for approval of a key employee incentive plan (KEIP) and payment of a bonus.
The motion explains, “The Debtor seeks to implement the KEIP for three (3) noninsider employees (the ‘KEIP Participants’) to pursue sales and marketing of the Debtor’s products and services. The KEIP Participants have unique and specialized knowledge and experience regarding the Debtor’s assets and industry, and the Debtor believes their services are critical for a value-maximizing sale process. Providing these employees with reasonable and appropriate incentives designed to maximize and preserve the value of the Debtor’s estate is a reasonable and appropriate exercise of the Debtor’s business judgment. The Debtor also seeks authority to pay the Bonus which is a prepetition-earned bonus by a former non-insider (the ‘Bonus Recipient’), in exchange for entry into a sixty (60) day consulting services agreement (the ‘Consulting Agreement’) pursuant to which the Bonus Recipient shall be available to the Debtor on an as-needed basis, including with respect to due diligence inquiries by potential purchasers of the Debtor’s assets.”
The motion continues, “The satisfaction of the Bonus and related entry into the Consulting Agreement is necessary to maximize value for the Debtor’s estate as this will aid in the Debtor’s effort to ensure a successful sales process for the benefit of the Debtor’s estate. The Bonus Recipient’s highly specialized and unique knowledge regarding the Debtor’s assets is essential for a value-maximizing sale process.”
The Debtors also petitioned the Court to file certain KEIP exhibits under seal. The Court scheduled a January 17, 2017 hearing to consider both motions, with objections due by January 10, 2017.
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