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§ 503(c)(1)

In re GT Advanced Techs. Inc.

Ruling
"Incentive plan" that was really a disguised retention plan for insiders could not be approved.
Issue(s)
Could debtor's "key employee retention plan" be approved?

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Commercial opinion summary, case decided on September 30, 2015 , LexisNexis #1015-115

In re Residential Capital LLC

Ruling
Debtor's motion for authorization to implement key employee incentive plan denied absent relationship to business goals.
Procedural posture

The chapter 11 debtor and its affiliated debtors (the debtors) filed a motion for authorization to implement a key employee incentive plan (KEIP) for certain key insiders of the debtors. The United States Trustee (UST) opposed the motion, arguing that 11 U.S.C.S. § 503(c)(1) applied to the KEIP because it was primarily retentive, and that the KEIP should not be approved because it did not meet the requirements of that section.

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Commercial opinion summary, case decided on August 28, 2012 , LexisNexis #0912-075

In re Hawker Beechcraft Inc.

Ruling
Approval of key employee incentive plan denied due to failure of insiders to meet BAPCPA standards.
Procedural posture

Debtors filed a motion seeking approval of their proposed key employee incentive plan (the "KEIP") and their non-insider key employee retention plan (the "KERP"). Following an evidentiary hearing, the court approved the KERP from the bench, and reserved decision on the KEIP.

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Commercial opinion summary, case decided on August 24, 2012 , LexisNexis #0912-117

In re Foothills Tex. Inc.

Ruling
Authorization to pay contractually due retention bonuses to two vice presidents of the debtor who were insiders denied.
Procedural posture

Corporate debtors brought a motion seeking authorization to pay contractually due retention bonuses to two vice presidents of the debtors, and thereby assume the retention bonus agreements with the two officers. At issue was whether the recipients were insiders; if so, the failure of the debtors to comply with the requirements of 11 U.S.C.S. § 503(c)(1) would likely bar the payments.

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Commercial opinion summary, case decided on July 28, 2009 , LexisNexis #0909-046

In re Global Home Prods. LLC

Ruling
Debtors'management incentive plan and sales bonus plan approved over union's objection.
Procedural posture

Chapter 11 debtors filed a motion for an order authorizing and approving a management incentive plan and a sales bonus plan.

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opinion summary, case decided on March 06, 2007 , LexisNexis #0407-077