Anthonys Urges Approval of Plan for Compensation
Titus, Nancy Raiden, THE JOURNAL RECORD
Attorneys for C.R. Anthony Co. on Wednesday urged bankruptcy court approval for the company's proposed compensation plan which would reduce some salaries but give top executives incentives for early confirmation of a plan of reorganization.
U.S. Bankruptcy Judge Paul B. Lindsey said he would take the matter under advisement but indicated that he was concerned about rewarding the management which brought the company to its Chapter 11 filing in the first place.
The motion before the court included a $750,000 Chapter 11 bonus pool which 13 executives could participate in based on a point system and the date of confirmation of a plan of reorganization.
Executives could earn their full shares of the pool if a plan is confirmed by June 1, 75 percent if a plan is confirmed between June 1 and Sept. 1, 50 percent if it comes between Sept. 1 and Dec. 1 and 25 percent if confirmation comes after Dec. 1, 1992. They would receive half the payment at confirmation and the other half one year later.
Other elements of the package include formalizing a severance plan for all full-time employees, minor salary adjustments, the elimination of benefits to executives that are not available to rank-and-file employees and schedules for payment of deferred and other unpaid compensation to executives.
John J. "Jack" Wiesner, chairman and chief executive officer of the company, said the bonus program was designed to accomplish two goals: keep management focused on operations, "which is ultimately what will get this company out of bankruptcy," and keep key managers with the company. The entire package would produce an annual savings of $150,000.
Lindsey, in his closing statements, said he was troubled by the notion of rewarding management "for doing what you would think is the job of those in management of a company in Chapter 11."
"A Chapter 11 operates with the debtor in possession," he said.
"That may not be the way it should be or the way everybody wants it to be, but it is a fact that this court deals with."
The judge's comments were similar to objections raised earlier by Mark Toffoli, attorney for the U. …