Wilmington, Del. – RadioShack is requesting bankruptcy court approval to pay up to $3 million in retention bonuses to eight executives and about 30 key employees.
The company said the payouts are needed to prevent defections that would hinder operations and could diminish the retailer’s sale price at auction, the Wall Street Journal reported.
The eight executives, who were not identified, helped raise RadioShack’s value by $30 million, the company argued, and would be in line to receive payouts of between $88,000 and $650,000 each. Another $1 million would be split among the 30 lower-level staffers after March 31 or when the bankruptcy sale closes.
The company also granted stay incentives to senior management nearly one year ago.
Separately, RadioShack is advising customers on its restructuring FAQ page that it will continue accepting its gift cards as payment through March 6, although it will no longer issue new cards. Honoring gift cards is rare for retailers under Chapter 11 protection, but in seeking court approval the chain argued that it must maintain the appearance of “business as usual” to retain customer loyalty and confidence, which is critical to the business.
The company had $44 million in gift cards outstanding as of Jan. 15, court documents show.
The filing also reveals that RadioShack sold $72 million worth of Assurant-provided service contracts during fiscal 2014. The chain asked for, and received the court’s OK, to continue the extended warranty program, along with approval to honor about $3 million in product rebates.
Elsewhere, A&G Realty Partners, which was hired to lease the roughly 2,000 RadioShack stores marked for closure, told the Dallas Morning News that it expects the liquidation sales to move “very quickly” and is expecting bids from many national and local retailers.
The stores range from 1,200 to 5,300 square feet and are generally located in strip and enclosed shopping malls. The list of available properties can be downloaded here.
Follow TWICE.com for continuing coverage of RadioShack’s reorganization.
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