The U.S. Trustee assigned to the Breitburn Energy Partners case filed with the U.S. Bankruptcy Court an objection to the Debtors’ motion for an order approving bonus programs for certain key employees.
The objection explains, “The Debtors have not met their burden to show that the KEIP (defined below), which seeks to pay cash awards to their most senior executives, is not a retention plan governed by Section 503(c)(1) of the Bankruptcy Code. Nor is it clear from the Motion and accompanying declaration whether the proposed metrics are truly incentivizing and difficult to achieve. Further, the KEIP should not be approved in its current form under Section 503(c)(3) because there is no evidence that the insiders would not perform their fiduciary duties and do the work necessary to maximize the value of the estates irrespective of the proposed bonuses.”
The objection continues, “The information provided regarding the KEP is also deficient. The KEP fails to disclose the amount of the bonuses to be awarded or the titles and job descriptions of the participants. 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 KEP participants are insiders and whether the proposed bonus plans should be evaluated under Section 503(c)(1). Finally, the KEP is to be paid at the discretion of the Board of Directors and/or Compensation Committee, with no enumerated criteria or Court oversight.”
The official committee of unsecured creditors also filed a separate objection to the same motion. Read more energy bankruptcy news.
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