The U.S. Bankruptcy Court approved C&J Energy Services’ motion to pay severance to certain non-insider employees.
The order states, “The Debtors are authorized to make payments on account of the Severance Program in excess of the $12,850 priority cap; provided that, such payments in excess of the $12,850 priority cap shall not exceed $400,000 in the aggregate.”
As previously reported, “During the prior 12 months, the average cash severance payment to each Eligible Employee severed was approximately $4,600, with total severance payments of approximately $6,200,000….Further, the Debtors seek relief to honor prepetition severance payments in excess of the $12,850 priority cap. More specifically, in light of the continued depression in the oil and gas industry, which continues to place increased pressures on the Debtors’ workforce, the Debtors seek authority to honor obligations to Eligible Employees under the Severance Program. By allowing the Debtors to honor their severance obligations to non-insiders, the Debtors’ estates will benefit from long-term cost reduction that far exceeds the short term cash outlay, as well as the flexibility to respond to the challenging business climate.”
Court-filed documents continue, “The Debtors estimate that approximately $85,200 is currently accrued and outstanding on account of prepetition severance payments in excess of the $12,850 priority cap. The Debtors estimate that up to $1,065,000 may become due and owing in the next 90 days on account of the Severance Program.”
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