Standard Register has sought permission in federal bankruptcy court to pay as much as $4.3 million in bonuses to selected employees as it goes through Chapter 11 bankruptcy reorganization.
The Dayton-based company filed the request for approval of its employee incentive program Sunday in U.S. Bankruptcy Court for the District of Delaware.
Mounting debt and pension obligations pushed Standard Register to file March 12 for Chapter 11, a move company executives said will leave the century-old Dayton business better positioned for growth. Chapter 11 allows the company to continue to do business under the court’s protection while attempting to reorganize its financial affairs.
The company said 49 senior-level or executive employees whose institutional knowledge or skills are essential to Standard Register coming out of bankruptcy successfully will be eligible for the bonuses, according to court documents examined by the Dayton Daily News.
Only 2 percent of the company’s workforce will be eligible for the incentive program. Standard Register has about 3,500 employees, including 850 in Dayton at its headquarters on Albany Street. The company said the eligible employees have been required to take on supplemental responsibilities among their normal day-to-day responsibilities.
The bonuses, which the company says will be attached to individual goals and will not be easy to reach, will help incentivise the eligible employees who are key to the company exiting Ch. 11, court documents said.
Employees eligible for the bonuses were not identified in the court records. The company asked that information remain sealed because it would jeopardize its ability to remain competitive.
After the sale of the company closes, all bonuses will be the responsibility of the buyer, according to the court documents.
As part of its bankruptcy filing, the communication services company signed a $275 million agreement to be acquired by an affiliate of Silver Point Capital L.P.
A hearing has been scheduled for May 12 in court to approve the incentive plan.
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