The Sports Castle on Broadway liquidated merchandise and prepared to close in March.
Three executives working at bankrupt retailer Sports Authority want a little something extra for their troubles. For the second time during the bankruptcy process, executives have asked the court to approve bonuses.
Undeterred by a previous rejection, Sports Authority has asked for $1.4 million for three executives. But in an Aug. 22 objection, the U.S. trustee in the beleaguered retailer’s bankruptcy calls the payment “large bonuses to insiders for work that is going to be done by other people.”
“The Debtors appear, once again, to be prioritizing insider executives above all other parties in interest, including unsecured creditors and the thousands of employees who have already lost their jobs,” wrote Andrew Vara, who represents the Justice Department as U.S. trustee.
Sports Authority says paying these executives will prod them to help with tasks like erasing personal info on company computers and ending employees’ 401(k) plans.
Vara writes that Sports Authority’s leaders are looking to get paid for “a sale that has already concluded” and that the bankrupt retailer has provided “only a brief, vague description” of how these three executives will help wind down the company.
Sports Authority first tried to push through a plan to pay its remaining leaders on July 12, asking court permission to give four unnamed executives a maximum of $2.8 million.
The court denied Sports Authority’s proposed payment plan on August 2.
The company tried again on Aug. 10, after one executive threw in the towel. It is now seeking a maximum of $1.4 million for the remaining three executives.
Again, the names of the executives have been sealed, and again, Vara objects.
“The proposed compensation payments will not provide competitors with any sort of advantage; they will only serve to hide the identities of insiders receiving funds so that there are no consequences,” the U.S. trustee wrote in his objection this week.
CEO Michael Foss and chief marketing officer Ron Stoupa left Sports Authority in June, according to a filing with the state.
The last round of layoffs at its corporate headquarters in Englewood is slated for Dec. 30.
The Sports Castle on Broadway liquidated merchandise and prepared to close in March.
Three executives working at bankrupt retailer Sports Authority want a little something extra for their troubles. For the second time during the bankruptcy process, executives have asked the court to approve bonuses.
Undeterred by a previous rejection, Sports Authority has asked for $1.4 million for three executives. But in an Aug. 22 objection, the U.S. trustee in the beleaguered retailer’s bankruptcy calls the payment “large bonuses to insiders for work that is going to be done by other people.”
“The Debtors appear, once again, to be prioritizing insider executives above all other parties in interest, including unsecured creditors and the thousands of employees who have already lost their jobs,” wrote Andrew Vara, who represents the Justice Department as U.S. trustee.
Sports Authority says paying these executives will prod them to help with tasks like erasing personal info on company computers and ending employees’ 401(k) plans.
Vara writes that Sports Authority’s leaders are looking to get paid for “a sale that has already concluded” and that the bankrupt retailer has provided “only a brief, vague description” of how these three executives will help wind down the company.
Sports Authority first tried to push through a plan to pay its remaining leaders on July 12, asking court permission to give four unnamed executives a maximum of $2.8 million.
The court denied Sports Authority’s proposed payment plan on August 2.
The company tried again on Aug. 10, after one executive threw in the towel. It is now seeking a maximum of $1.4 million for the remaining three executives.
Again, the names of the executives have been sealed, and again, Vara objects.
“The proposed compensation payments will not provide competitors with any sort of advantage; they will only serve to hide the identities of insiders receiving funds so that there are no consequences,” the U.S. trustee wrote in his objection this week.
CEO Michael Foss and chief marketing officer Ron Stoupa left Sports Authority in June, according to a filing with the state.
The last round of layoffs at its corporate headquarters in Englewood is slated for Dec. 30.
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