Post by gsxr1100 on Aug 15, 2013 9:48:17 GMT -5
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U.S. Trustee objects to Kodak executive bonuses
Aug. 15, 2013 10:05 AM | 2 Comments
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Kodak office from the air. Purchase Image
Kodak office from the air. / JAMIE GERMANO / staff photographer
Written by
Matthew Daneman
Staff writer
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Business
Kodak
Antonio M. Perez ZOOM
Antonio M. Perez
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An arm of the U.S. Justice Department is objecting to aspects of Eastman Kodak Co.’s plan to end its Chapter 11 bankruptcy, in part because of the big bonuses the company proposes paying to some of its top executives.
In a 21-page objection filed this week with the U.S. Bankruptcy Court, the U.S. Trustee overseeing Kodak’s bankruptcy says that the bonuses, including a proposed $1.9 million payout to CEO Antonio M. Perez, are not allowable under federal bankruptcy law. The $1.9 million is part of a package of cash and stock Kodak proposes paying some of its top bosses on its exit from bankruptcy.
In its objection, the U.S. Trustee cites changes to federal bankruptcy laws that were instituted in 2005 to crack down on retention and incentive payments to insiders.
The U.S. Trustee objection also singles out payments to U.S. Bank as being unclear for their rationale and the fact that Kodak’s proposed exit plan from bankruptcy contains legal language that would protect various parties such as its executives from legal claims. Several former Kodakers are suing Perez and the company’s board members for alleged failures of fiduciary duty.
Kodak will be in U.S. Bankruptcy Court in Manhattan on Tuesday, seeking court approval.