Bankrupt Interstate Bakeries’ bonus plan sparks objections ($6 million in bonuses to management)

[Omaha Steve]

http://www.kansascity.com/business/story/500045.html

Posted on Thu, Feb. 21, 2008 10:15 PM

By JENNIFER MANN
The Kansas City Star

Several parties in Interstate Bakeries’ reorganization have filed objections to the bankrupt company’s plan to pay more than $6 million in bonuses to 514 management employees.

Objections came from the unsecured creditors committee, which represents creditors owed $330 million; the International Brotherhood of Teamsters; and the Bakery, Confectionery, Tobacco Workers and Grain Millers Union. The unions represent IBC’s 20,000 union employees.

The creditors committee notes that more than 30 percent, or $1.8 million of the total bonus amount, is allocated to a group of 17 individuals. Of that $1.8 million, four individuals are to receive about 15 percent of the total, or $892,000.

The committee argued that IBC’s proposal fails to “articulate a reasonable basis for why the incentive plan should be approved at this late stage in the (company’s) fiscal year.”

“In essence, the incentive plan seeks to pay selected employees significant bonuses for work they would have performed even if no incentive program was instituted,” the court filing said.

The unions argued the funds that IBC is proposing to spend is money that it “can’t afford to spend at this point.”

FULL story at link.