Posted by chicagomedia.org on June 10, 2009 at 13:21:29:
Sun-Times seeks $1.8M in exec payouts after sale
By: Lorene Yue
June 09, 2009
(Crain's) - Sun-Times Media Group Inc., which has been slashing jobs and closing down newspapers to cut costs, wants to pay 20 employees up to $1.8 million in bonuses if the company is sold for a certain amount.
The owner of the Chicago Sun-Times and dozens of suburban papers recently filed the request in U.S. Bankruptcy Court in Delaware. It filed for Chapter 11 bankruptcy protection on March 31, becoming the city's second media company to do so. Tribune Co. sought Chapter 11 protection from its creditors in December.
The same day that Sun-Times Media asked for permission to pay the bonuses, it also asked the court to allow it to file under seal a version of the request that discloses the amount it hopes to fetch in a sale, as well as who would get the bonuses and how much each would stand to gain if it were to get that sale price or more.
The Chicago-based company claims in its request that publicizing that "sensitive information" would put it at a disadvantage in seeking buyers.
"If revealed, this information would influence the negotiation of the asset sale and jeopardize the debtors' ability to obtain the highest possible sale price for all the debtors' creditors," Sun-Times' lawyers wrote in the request.
The IRS and the U.S. Trustee have both objected to the request to place the sale and bonus amounts under seal.
Sun-Times wants to pay 20 unidentified employees and members of management a lump-sum cash bonus equal to more than 40% of their base salary, for a total not to exceed $1.8 million, only if "they achieve certain price targets for the sale of the assets," according to a court document.
"Therefore, the (sale incentive plan) will truly incentivize the personnel who will have critical responsibility, substantial oversight and control during the sale process," the document said.
A Sun-Times representative could not immediately comment.
A Delaware Bankruptcy Court judge is scheduled to consider the requests on Wednesday.