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The U.S. trustee wants to kill an Eastman Kodak Co. plan to hand out $13.5 million in bonuses.
In an April 4 motion in the Chapter 11 bankruptcy Kodak filed in January, the company proposed a plan to make the payout to an unspecified slate of employees as retention bonuses to keep midlevel executives and other workers from jumping ship. Some $8 million of the total would be targeted to non-insider executives, Kodak said. Insiders, such as chairman and CEO Antonio Perez and other top officers, would not be rewarded under the plan.
In papers filed Monday with the Manhattan U.S. Bankruptcy Court, the U.S. Trustee Tracy Hope Davis said Kodak had not supplied enough detail to ensure that high level officers would not benefit.
“The debtors must meet a heavy burden to show that these employees are not insiders as that term is defined in the Bankruptcy Code,” Davis said. “Unless and until the debtors meet their burden, the bonus plan must be denied.”
Other factors the trustee cited as reasons to deny the request include Kodak’s failure to show that the bonus payout would be reasonable, and a lack of clarity as to whether the plan is discriminatory.
Bankruptcy Judge Allan Gropper is slated to consider the bonus plan next week.
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