RadioShack is asking the bankruptcy court to approve up to $3 million in retention bonuses for top executives and other “critical employees.”
The Fort Worth-based electronics retailer, which filed for Chapter 11 bankruptcy protection last week, said it has identified 8 executives and 30 employees who are critical to the sales and operations of the company.
A hearing on the executive bonuses is scheduled for March 4, with objections to the motion due on Feb. 25.
In its court filing, RadioShack argued that the key executives are necessary to maximize the value of the assets for creditors.
“[These executives] worked tirelessly to help negotiate a stalking horse bid, and were further successful in raising the bid by more than $30 million from the initial bid,” the bankruptcy filing said. “As this case continues, the [executives] will continue to provide critical support to the debtors in their highly complex, multi-party negotiations with potential buyers and current lenders.”
As it filed for bankruptcy last Thursday, RadioShack announced a deal to sell from 1,500 to 2,400 of its store locations to Standard General, a hedge fund that was also its biggest shareholder. Separately, Standard General secured an agreement with Sprint to open wireless stores inside up to 1,750 of the locations.
This week, U.S. Bankruptcy Judge Brendan Shannon in Wilmington, Del., approved $10 million in financing to pay for costs to close as many as 2,100 of its 4,000 company-owned stores.
The court filing did not name the eight executives. RadioShack has asked the court to allow it to set aside $2 million for them, ranging from $88,000 to $650,000 for each. The executives would receive the bonus money in three separate payments.
For the other 30 critical employees, RadioShack wants to reserve $1 million for retention bonus payments.
Last March, RadioShack’s board approved retention bonuses for its top five executives if they stayed with the retailer through March 1, 2015. Under that program, RadioShack’s chief executive Joe Magnacca was set to receive $500,000 if he stayed with the company. Three of the executives left the company anyway.
Andrea Ahles, 817-390-7631