CUMBERLAND — A federal bankruptcy judge in Delaware has approved a bonus plan worth $1.5 million for 15 NewPage company executives.
Meanwhile, contractors and suppliers from large companies to mom and pop operations hope they’ll be able to recoup money owed by NewPage for services and supplies already rendered. Most of them have received nothing during the bankruptcy proceedings so far. NewPage owns the Luke paper mill. The plant employs 870 people. A listing of those creditors for the Luke plant alone takes up several tightly printed pages in court documents.
One of those contractors who contacted the Times-News was disgusted.
“Well, maybe in a year or so I might receive a few cents on the dollar. But instead of paying the people they owe money to, they are going to offer bonuses to the top executives. ... Stiff the little guys and give bonuses to the executives while you’re at it,” he wrote.
The contractors are owed anything from a few hundred to tens of thousands of dollars and more.
Federal Bankruptcy Judge Kevin Gross issued the order Dec. 13 in Wilmington, Del. The judge has not yet decided on the long-term incentive plan.
“...and any objection to the STIP (Short Term Incentive Plan) motion having been withdrawn or overruled; and the court having found and determined that the relief sought in the STIP motion is on the best interests of the debtors, their estates and creditors, and all parties in interest. ... Ordered that the STIP is approved in its entirety,” the order reads.
NewPage filed documents requesting court approval for the payments in the U.S. Bankruptcy Court for the District of Delaware on Nov. 22.
The company has also asked to seal many of the documents it plans to file in support of the request, which the company claims contain personal information about the executives and company information that should be protected from public release.
“If such information were made publicly available, the disclosure would significantly harm the debtors’ operations and the stability of their work force,” the company states in a court document.
According to documents filed with the bankruptcy court, the short-term incentive program will equal about $100,000 per executive, or just more than $200,000 if the 2011 and 2012 incentives are approved.
To qualify, the executives will need to meet a performance standard. The payouts would equal 40 percent to 150 percent of base salary, according to a presentation filed with the bankruptcy court as an exhibit.
A list of the officers who could earn the incentive includes George F. Martin, the president and chief executive officer of the company, and several senior vice presidents, one of whom holds the title vice president, sustainable profitability.
“The ... participants play a pivotal role in driving the debtors’ financial and operating performance and their ability to successfully restructure,” according to the company’s court filing.
The executives “have dedicated themselves to maximizing value ... by providing exceptional service under extreme conditions and exigent circumstances, far beyond the ordinary call of duty.”
Bankruptcy court documents may be found at: http:// www.kccllc.net/newpage.
Contact Matthew Bieniek at mbieniek@times-news.com.
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