The U.S. Trustee assigned to the Breitburn Energy Partners case filed with the U.S. Bankruptcy Court an objection to the Debtors’ retention and incentive program for certain key employees.
The objection asserts, “The Debtors seek the Court’s approval to pay approximately $11.6 million in bonuses pursuant to the KEP and KERP bonus plans. The United States Trustee objects to the approval of the bonus plans in their present form because the information provided is deficient. With respect to the KEP and the KERP Rank and File Incentive Program, the Debtors proffer the bare assertion, without any supporting evidence, that the KEP and KERP Participants are not insiders. The Debtors fail to disclose the titles, roles and job descriptions of the Participants so that the Court and other parties in interest can determine whether any of the Participants are officers who were appointed by the Board, are individuals who exercise control of the Debtors’ day-to-day business or are entitled to indemnification.”
The objection continues, “The Debtors also fail to provide the actual amount of the individual bonuses that the Participants may receive. Without this information it is not possible for the Court, the United States Trustee and other parties in interest to determine whether any of the Participants are insiders and whether the proposed bonus plans should be evaluated under Section 503(c)(1). In addition, the KEP, KERP and proposed Discretionary Fund bonuses are to be paid at the discretion of the Board of Directors and/or Compensation Committee, with no enumerated criteria and Court oversight.”
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