OneWeb, despite its bankruptcy, wants to pay special incentive bonuses to its few remaining staff in order to hold onto their skills during and perhaps beyond the bankruptcy process.
But the US Trustee is objecting strongly. In a filing to the Court the Trustee reminds Judge Robert Drain that OneWeb paid out “large bonuses…shortly before the commencement of the Chapter 11” proceedings.
It argues that the Bonus Motion from OneWeb as a ‘debtor in possession’ does not fulfil Congressional rules implemented in 2005 and which requires a high burden of proof. “The Bonus Motion, however, is lacking in all these respects,” says the Trustee.
The filing cites the aggregate payments of which $1.130 million – $3.955 million would be shred to six senior executives at OneWeb (under OneWeb’s ‘Key Employee Incentive Plan’ request to the Court. “The Debtors make no attempt, however, to show that this range of bonuses is reasonable under the facts and circumstances of these chapter 11 cases. The Debtors have failed to meet their burden of providing critical, relevant and material information,” states the US trustee.
“[The OneWeb request] also fails to provide information as to why each of their respective services are critical to the successful sale of the Debtors’ assets,” says the Trustee, “and fails to take into account the elephant in the room: namely, the bonuses paid to the insiders just a few days before the Debtors commenced these chapter 11 cases.”