Furniture Brands International bankruptcy judge okayed millions in executive bonuses, overruling a trustee's objection, but capped it at $3.5 million - below the $4 million-plus originally requested.
Bankruptcy Judge Christopher Sontchi said such a payment was in the best interest of the creditors and Furniture Brands, parent of Thomasville Furniture, Broyhill, Lane and other brands, as well as its creditors.
The court clerk blacked out the names of the seven senior executives and 48 non-insider managers considered key to the reorganization and sale. So the list of 55 Key Employee Incentive Plan (KEIP) and Key Employee Retention Plan (KERP) recipients was not made public.
Furniture Brands Continuing Coverage
The same seven senior executives would share in the KEIP, which under the original plan would generate a pool of $1.7 million for incentives "plus 3% of excess gross sale proceeds," according to court filings. For the KERP, those of the 48 designated employees who remain through the sale date of Furniture brands would shared in a pool of $2,174,747.
As the case progresses, creditors are receiving offers to sell assets at a discount. Sonar Asset Management Group, an Armonk, NY, private investment company that specializes in the purchase of trade claims, offers to pay 70% of face value for "Administrative Priority" claims held by creditors in the Furniture Brands International, Inc. bankruptcy - in exchange for assignment of the claim.
St. Louis-based Furniture Brands International, which once boasted sales of $2 billion, filed for bankruptcy Sept. 9 in Delaware Federal Court. The furniture maker's travails have affected many subcontractors and suppliers, listed in a 1700-page creditors list.
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