I.B.C. bonus plan under fire from creditors, unions
February 22, 2008
by Eric Schroeder
KANSAS CITY — A plan proposed earlier this month by Interstate Bakeries Corp. seeking approval from the U.S. Bankruptcy Court for the Western District of Missouri to pay up to $6 million in bonuses to 520 top employees came under fire this week from the company’s unsecured creditors committee, the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers Union. In a court filing Feb. 19 the unsecured creditors called the plan "an unreasonable exercise of the debtors’ business judgment." The creditors objection focused on the fact approximately 31% of the approximately $1.8 million payout would be allocated to a group of 17 individuals, with four of those individuals set to receive approximately $892,000, or 15%. In its objection, the Teamsters said bonus programs "are unsavory and should be held to a high standard." In its Feb. 6 filing, I.B.C. said the fiscal 2008 incentive-based bonus plan is designed to motivate the employees to "increase the profitability and advance the interests of the company, thus increasing the debtors’ enterprise value and enhancing the returns for all stakeholders during the debtors’ Chapter 11 cases."