December 12, 2018 – The United Mine Workers of America objected [Document No. 417] to the Debtors’ proposed Key Employee Incentive Plan (the “KEIP”) and Key Employee Retention Plan (the “KERP”) [Docket No. 354].
The objection states, “It is undisputed that Debtors did not consult union representatives in the design of the retention programs identified in their Motion. Debtors provide no explanation regarding why the Unions were not consulted, nor why employees represented by the union were not included in the plans.”
In respect of the KEIP, the objection states, “The proposals for the KEIP plan are incredulous. The UMWA is astounded that the Debtors, its attorneys, and advisors can advance the argument for the KEIP. The Debtors have apparently been losing millions of dollars on a monthly basis for the nine short months of the Debtors’ existence in its present form. The very leaders who have caused such a catastrophe are now sought to be rewarded. It is also critical to remember that these same two individuals each took bonuses of $365,000 on the eve of bankruptcy. Rather than the Debtors rewarding them with estate funds, the UMWA believes, in the exercise of their fiduciary duties, the Debtors should be considering filing Chapter V avoidance actions.”
In respect of the KERP, the objection states, “There is no reasonable relationship between the Plan proposed and the results Debtors seek to obtain. Specifically, there are no timely identified key employees. The UMWA represents over half of the Debtors’ current workforce and not one employee is deemed worthy. The proposed Plan appears to be designed to provide bonuses to management level employees only and is not tailored to Debtors’ purported goal to keep its critical workforce intact until the proposed sale process is complete. While the retention program rewards management and supervisory personnel, Debtors admit that it covers only 5% of total employees, and those who are covered are only non-bargaining unit employees….The plan is unfair and discriminatory because it was explicitly designed to exclude bargaining unit employees while focusing on management. The Debtors discriminate against the life blood of its workforce by compensating its non-bargaining unit employees, while including no plan to retain the bargaining unit employees who run the mines.”
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