U.S. Bankruptcy Court judge Mary Walrath may be a new folk hero. She’s the judge handling the Sports Authority case, and today she ruled that four Sports Authority executives will not receive a combined $2.85 million in bonuses that the company claims are incentives. Incentives for running the company into the ground?
Sports Authority couldn’t find a buyer for its stores in bankruptcy, and 14,000 people across the country have lost their jobs as the chain concludes its going out of business sales and finally closes down. Some of those people have apparently contacted the bankruptcy court, and Judge Walrath wants them to know that she got the message.
“Quite frankly, I’m not surprised the employees are sending angry emails,” she told the court during a hearing today. The argument in favor of the bonuses was that the payments were incentive payments coming from the lenders.
One of those incentives was to keep “shrinkage” down, or make sure that employees and shoplifters didn’t make off with the liquidation merchandise. Isn’t that the store managers’ job? Maybe they should have split the $2.85 million instead.
Judge Walrath wasn’t having it, following a trend in bankruptcy court of not granting big incentives to executives. “I think it’s just inappropriate to pay senior executives bonuses when all the employees are losing their jobs,” she said during the hearing.
Judge Rejects Bonus Package for Sports Authority’s Top Executives [Wall Street Journal]
by Laura Northrup via Consumerist
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