The Chapter 11 Trustee of New England Confectionery Company filed with the U.S. Bankruptcy Court an expedited motion for entry of an order authorizing estate to enter into employee compensation plans.
The motion explains, “In order to maintain and incentivize employees to remain with the Debtor before and after the sale closing, the Debtor offered its employees three programs….The Prepetition Management Plan…made available approximately $1,300,000 to five (5) key management employees….The Prepetition Retention Plan has two components. The first component provided retention payments aggregating approximately $176,000 to eleven (11) middle management employees….The second component of the Prepetition Retention Plan provided for retention payments aggregating approximately $400,000 to fourteen (14) middle management employees….The last Prepetition Employee Program was the establishment of a fund in the amount of $150,000.…The Chapter 11 Trustee has reviewed the Prepetition Employee Plans that were established prior to his appointment….The Modified Management Plan provides for the same amounts to each eligible employee as were provided for in the Prepetition Management Plan, subject to certain modifications … (i) 50% of the incentive payment under the Modified Management Plan…upon closing of the sale of all or substantially all of the Debtor’s assets to the Stalking Horse Bidder in accordance with the APA; (ii) if there are no Competing Bids, up to 25% of the Incentive Payment based upon the following: (a) one – half of one percent (.5%) of the Incentive Payment for each $10,000 increase in the ‘Adjusted Net Purchase Price’ above $11,747,900, payable upon determination of the Adjusted Net Purchase Price. Adjusted Net Purchase Price shall mean the Purchase Price of $13,296,900 pursuant to the APA, reduced by working capital adjustments…(b) one- half of one percent (.5%) of the Incentive Payment for each $10,000 recovered by the Estate on account of the Buyer’s sale of the Purchased Assets…(iii) if there are Competing Bids, up to 25% of the Incentive Payment based upon the following (a) 5% of the Incentive Payment upon the closing of the sale of all or substantially all of the Debtor’s assets if there is a Competing Bid in the minimum amount of $13,961,900 pursuant to the Bid Procedures; (b) 5% of the Incentive Payment upon the closing of the sale of all or substantially all of the Debtor’s assets for each additional $100.000 increment at the auction above the overbid amount of $13,961,900, not to exceed 20% of the Incentive Payment; (iv) 25% of the Incentive Payment if the eligible employee continues to provides services to the Estate until the earlier of July 31, 2018 or termination without cause.”
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