Mission Coal unsecured creditor group objects to employee bonus plans

By Caroline Salls

Pittsburgh, Dec. 13 – The official committee of unsecured creditors appointed for Mission Coal Co., LLC’s Chapter 11 case objected Wednesday to the company’s motion for approval of key employee retention and incentive plans, according to a filing with the U.S. Bankruptcy Court for the Northern District of Alabama.

“The committee objects to the proposed KEIP bonuses because they are unnecessary and duplicative of pre-petition bonuses that were paid to these same executives on the eve of bankruptcy,” the objection said.

Specifically, the committee said the Mission Coal debtors paid $1.49 million in bonuses to three of their top executives two days before the bankruptcy filing, leaving the company with about $55,000 in its bank accounts on the filing date.

The creditor group said two of those three executives would be eligible for an additional $281,875 in bonuses under the proposed KEIP.

In addition, the committee said the bonus plan constitutes a “stay-and-pay plan,” under which the participants will be entitled to the full bonus if Mission Coal complies with the sale milestones and/or achieves sufficient sales proceeds to pay off its debtor-in-possession facility, but provides no recovery to other creditors.

Mission is a Kingsport, Tenn.-based coal company. The company filed bankruptcy on Oct. 14 under Chapter 11 case number 18-04177.

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