Circuit Seeks Staff Stay-On Bonuses
By Alan Wolf -- TWICE, 2/10/2009
Richmond, Va. — Circuit City is asking the United States bankruptcy court here to approve a plan to pay executives and other employees as much as $4.7 million in retention bonuses to continue the company’s shut down.
Inducements under the “Wind Down Incentive and Retention Plan” include a maximum of $2.3 million for 16 senior executives, including CEO James Marcum and chief merchandising officer John Kelly; $1.6 million for 137 “tier 2” employees; and a discretionary bonus pool of $750,000 to be paid out as needed.
The chain argued the bonuses are necessary to keep essential staffers on board through the wind-down process, and to compensate them for the significantly greater hours required, court documents show.
The company said a successful completion of its liquidation and wind down will yield about $250 million in additional value. Staffers will be paid in increments based on the completion of their tasks, which include liquidating remaining assets, shutting down remaining businesses, minimizing administrative expenses, reconciling claims and considering legal actions that would benefit Circuit City and its estates.
Under the plan, Marcum could receive a maximum of $375,000 and Kelly could get upwards of $242,500.
The court is expected to decide on the request later this month.
In other Circuit City bankruptcy actions, the company has hired Liquid Asset Partners, a Grand Rapids, Mich., liquidator, to sell off all its furniture, fixtures and equipment from seven distribution centers, four service centers, two corporate offices and one call center.
Separately, the bankruptcy court has ordered Circuit City to pay DVD distributor Alliance Entertainment more than $1 million for storing and shipping discs during its liquidation sale, according to TWICE sister publication Video Business.
Elsewhere, Verizon Wireless has reportedly laid off 45 percent of its employees that man the carrier’s standalone shops located in select CircuitCity stores. Web site FierceTelecom quoted Verizon Wireless spokesman Harold Waterman as saying the company would provide severance and outplacement services to “those we cannot unfortunately retain."
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Here is a great solution- burn down the rest of the stores and have all the upper level execs. split the insurance money. Those poor guys only getting $300K!!!! How dare the bankruptcy court not give them more- how do they expect the sale to complete without their leadership and guidance?
rad - 2009-10-2 22:34:00 EST -
Who needs Marcum and Kelly? Why not hire Bernie Madoff if you really need a good thief? Marcum and Kelly are small timers.
Phil Emup - 2009-10-2 19:27:00 EST
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