Following A & P’s filing for bankruptcy, the company has announced its bid for a $6.8 million Bonus Plan to its employees. This raised considerable objections at the U.S. Trustees office, its creditors and unions. The main reason for this objection is that the said plan sounds more like a ‘retention’ plan rather than a bonus plan.
According to the groups who objected to the plan, the Company seems to be using the bonus plan to entice its employees to remain with the company. This, as the protestors say, could be a retention plan for its employees until it can come up with a long term Incentive Plan.
The Company’s Official Committee of Unsecured Creditors has stated that the reason for their objection is that they cannot figure out how a company can first device an incentive plan even before creating a business plan. They have even referred to it as a “Band-aid” plan.
A & P’s representatives have yet to comment on the objections. The Great Atlantic and Pacific Tea Co. (A & P) filed for the Chapter 11 Bankruptcy Protection just December of last year with an enormous debt equivalent to $800 million (debtor-in-possession) fully countersigned by J.P. Morgan. The Company previously stated that being in a debtor-in-possession loan allows them more time to create a plan, as it has an 18-month maturity. However, A & P still has no solid course of action in terms of a business plan, despite scheduling its bankruptcy financing.
Coincidentally, Judge Robert Drain of the U.S. Bankruptcy Court in New York will give out a ruling on A & P’s request to close 32 more of its stores by April 15 on the same hearing that he will give out a ruling on A & P’s bid for the Incentive Plan.
News Source: The Wall Street Journal