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Revlon can move forward with a bonus plan for key employees after getting the green light from the federal bankruptcy judge overseeing its Chapter 11 case.
The company has up to $15.4 million it can give employees to retain them. Eligible for the bonuses are 160 employees whose work Revlon management in court papers deemed “critical to the Debtors’ restructuring process and/or day-to-day operations.”
In requesting court permission to pay the bonuses, Revlon referred back to its high turnover rate (up to 25% for some critical employees) as the cosmetics giant struggled with liquidity and turmoil in its supply chain.
As vendors stopped shipping critical ingredients and other supplies, or threatened to stop, corporate employees were forced “to deal with vendor negotiations and become sidetracked from the responsibilities for which they were hired,” Revlon said.
To be eligible for the bonuses, employees must stay at least through the confirmation of a bankruptcy plan or a date of June 30, 2023.
The U.S. trustee assigned to Revlon’s case had objected to the bonus plan, citing a lack of information about the recipients and their job duties.
While the bonus plan is designed for non-insiders who work at Revlon, including those with executive titles, the trustee said that the recipients were “presumed to be insiders” until Revlon could show otherwise.
The plan had the support of the unsecured creditors’ committee in the case, who said in a court filing they agreed with Revlon that “the retention of key employees is critical to their operations and restructuring efforts.”
The ruling judge found that the plan met all the legal criteria for bonuses allowable under the bankruptcy code.
via https://www.aiupnow.com
Ben Unglesbee, Khareem Sudlow
