By Tom Corrigan
The government bankruptcy watchdog overseeing Green Field Energy
Services Inc.'s restructuring is objecting to the company's
proposed employee bonuses, advising the court to intervene.
In court documents filed Tuesday, U.S. Trustee Roberta A.
DeAngelis said the bonus plan--notable details of which, including
the amount, have been redacted--was structured to entice employees
to remain with the company through its bankruptcy instead of
rewarding them for performance. Retention bonuses are generally
illegal for high-level employees, whose bonuses in bankruptcy must
be tied to challenging goals meant to achieve a successful
restructuring.
"Despite the label of the bonus plan, the bonus plan is
structured to entice the debtors' insiders to stay with the
companies and do their jobs through the conclusion of the
restructuring process, rather than entice the insiders to perform
at a high level to achieve significant benchmarks," she said.
Bonuses paid during bankruptcy are not uncommon, though they are
subject to regulations and have faced increasing opposition from
the Justice Department's bankruptcy watchdogs in recent years.
Ms. DeAngelis filed a separate objection to Green Field's motion
to keep information about the company's bonuses under seal, which
means relevant information--such as which employees would receive
bonuses and the criteria for calculating those bonuses--could
permanently be shielded from public view.
Ms. DeAngelis was provided with an unredacted copy of the bonus
plan, a redacted version of which Green Field filed with the
bankruptcy court on Dec. 17.
Green Field, which supplies equipment used by the oil and
natural gas industry, is currently exploring opportunities to sell
its assets as part of its Chapter 11 restructuring efforts.
The Louisiana-based equipment supplier said it plans to put its
assets on the auction block under the supervision of Judge Kevin
Gross of the U.S. Bankruptcy Court in Wilmington, Del.
Green Field, which filed for Chapter 11 protection in October,
blamed its financial difficulties on the significant amount of debt
it took on to finance a shift toward natural gas in 2010 as that
sector appeared to present an opportunity for growth.
At the time of its bankruptcy filing, Green Field had $255.9
million in bond debt, an $80 million credit facility owed to Shell
and $98.6 million in trade debt.
The company was formed in 1969 and changed its name to Green
Filed Energy Services Inc. in 2011. Green Field is based in
Lafayette, La., and employs 355 people at 14 facilities throughout
Texas and Louisiana.
--Stephanie Gleason contributed to this article.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
Write to Tom Corrigan at tom.corrigan@wsj.com
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