$6 Million ‘trust’ Fund For Executives A Concern In A&P Bankruptcy Case

3 months prior to it submittedapplied for bankruptcy, Montvale-based AP established a $6 million trust account to make sure it might continue to pay its top executives throughout the bankruptcy proceedings, according to court files.

That multi-million-dollar trust account has actually ended up being an issue in the business request for approval of an extra $5 million in retention pay for executives and store supervisors. A hearing on the retention pay request is scheduled for Friday before US Bankruptcy Judge Robert Drain.

The Great Atlantic Pacific Tea Company (AP) submitteddeclared bankruptcy July 19. The company intends to offer mostthe majority of its stores and leave the grocery store business.

Related:
AP asks court to OK $5 million in retention pay for executives, supervisors

Financial documentations filed by AP with the bankruptcy court reveal that of the $6 million, the company set aside $2.5 million in trust for one unnamed director and made two $1.5 million trust contributions for individuals identified just as current policemans. A spokesperson for AP said Wednesday the company is not divulging the identity of those individuals.

The request for incentive pay and the discoveries about the $6 million trust account come as employees at some AP-owned stores, consisting of 2 Pathmarks in Clifton, are being laid off and receiving just 52 percent of their eligible discontinuance wage, as the outcome of a bankruptcy court ruling. The Pathmark workers in Clifton also are barred from bumping or replacing less-senior store employees due to the fact that of another judgment related to the bankruptcy.

While union-represented employees are getting only 52 percent of their severance pay and have actually lost bumping rights due to those rulings, some executives and managers will be receiving almost half of their salary to work in between one and 3 months, an objection submitted by the United Food and Commercial Employees International Union states.

Related:
Judge lets AP limitation seniority bumping; unions provided greater severance

APs request for retention pay for executives and managers is outrageous, mentions a short by 1199SEIU United Health care Workers East, which represents 375 Pathmark workers, another union objecting to the demand.

Kenneth Harrington, a federal bankruptcy trustee, likewise has filed a motion opposing APs demand.

AP, in submitting the demand for the $5 million in retention pay on Aug. 25, argued that it needshas to pay rewards to top workers to keep them on the job throughout the sales of the shops and the bankruptcy process. AP stated that lost 54 high-level staff members after filing for bankruptcy.

The retention incentives would go to 495 workers, 83 of them business staff members and 412 of them field-level non-union employees, such as store supervisors.

Trustee Harrington, in his objection, said AP, by not identifying the 83 business companies, or offering more details about their tasks, didnt satisfy the requirement of the law that it should prove that those getting retention pay are not business experts. Usually, Harrington argued, policemans of the business are thought about experts.

Among the objecting unions, 1199SEIU United Health care Employee East, noted that Congress and the courts have acted in the past to prevent unjust payments to executives in a bankruptcy proceeding. The union cited a court decision in the US Airways Inc. bankruptcy case that found that retention payments too commonly have actually been used to lavishly reward – at the expenditure of the lender body – the very executives whose bad choices or absence of foresight were accountable for the debtors monetary predicament.

AP, in financial declarations accompanying its bankruptcy filing, detailed an overall of over $13 million in payments to business directors and executives throughout the 12 months prior to the bankruptcy filing, including consulting fees to one director of as high as $100,000, along with month-to-month vehicle allowances averaging $700 for several policemans, monthly cell phone allowances, cost account reimbursements of as high as $7,161, and incentive payments to 2 executives, one for $400,000, and the second in the amount of $100,000.

Email: verdon@northjersey.com!.?.!

Tales From The Beat: The Bankruptcy Of American Airlines

  • Tales from the Beat: Gordon Bethune
  • Tales from the Beat: Robert L. Crandall
  • Tales from the Beat: Herbert D. Kelleher
  • Turning up: Tales from the Beat
  • It wasn’t just a two-year story, from the filing on Nov. 29, 2011, to the day its plan of reorganization took impactworked, Dec. 9, 2013. The build-up to it took a variety of years, and one could argue it goes on today as American Airlines Group continues to execute its merger with United States Airways, a key part of the plan of reorganization.

    Although I initially started on the aviation beat at the Dallas Morning News on Oct. 1, 1990, it can be found in three stints. The last started July 12, 2006. From that point, a significant part of covering American was its persistent losses and its deteriorating relationship with its unions, most noticeably the Allied Pilots Association. The labor-management relationship wasnt assisted by huge awards of stock that supervisors got while rank-and-file staff members worked under concessions removed in early 2003.

    What I was learning through mid-2011 onwards was that the AMR board was pressing leading executives to obtain an offer with the pilots, amid a growing belief that it was ineffective and the airline was going to need to submit Chapter 11 papers to get its costs down.

    In early November 2011, I had a most uncommon meeting. A leading AA executive and a top APA official called me to a secret meeting, simply the three people. The message was that it was extremely vital for the pilots and airline to obtain an offer or something bad may veryeffectively take place.

    Okay, it soon ended up being clear what they were indicating. AMR would submitapply for bankruptcy if there wasn’t a union contract fast. However they wouldn’t say so. They only stated that the airline would be compelled to take steps, without stating what those steps might be.

    It also ended up being clear that they wanted me to conclude that a bankruptcy filing was coming, without that conclusion coming out of their mouths. For that reason, when the financial markets moved because of my report or pilots responded terribly to the pressure, it wouldn’t be their fault.

    My response to them was that it depended on them to say it if that was exactly what they wanted reported, that they must take more responsibility for what would be a disastrous story. They would not doing this.

    In mid-November, the pilot union’s board declined the business’s last offer. Union authorities recommended that the two sides were close which an offer was possible. However management and the AMR board understood it indicated the airline company wasn’t getting an appropriate offer.

    When I arrived house from work around 7 pm Monday, Nov. 28, 2011, I returned to the master restroom to alter from my work clothes. Before doing so, I inspected my e-mail to see if anything had actually been available in since I left work.

    “I hear that there’ll be a huge statement tomorrow,” an AA worker at DFW airport had actually written me, “but I make sure you knew that.”

    I didn’t know of any huge statement. The rulegeneral rule is that if AA tells me there’s going to be a big announcement, it will not be big. If there’s an announcement coming and American didn’t tell me, it’ s likely to be extremely big.

    With the possibility of bankruptcy looming, I began working the story. I called a couple of people in American’s business interactions workplace. No one understood anything, or would confess that they understood anything. One stated she had been told to report early to the workplace – really early, like prior to 6 am, however would state absolutely nothing more.

    Another one informed me that a stream of individuals had actually been entering into and from vice president Andy Backover’s office. I got some names of people who they had heard had signed non-disclosure contracts.

    I called one, a good friend, who became really worried extremely quickly when I stated I was checking out the possibility that American was preparing to fileapply for bankruptcy. I could virtually hear the gulping over the phone. He had actually signed a non-disclosure arrangement and would tell me nothing.

    So I asked him if my profession would be irreparably besmirched if I reported that American Airlines was planning a big announcement Tuesday amid speculation that it was preparing to go into bankruptcy proceedings. A long pause. No, my profession would not be damaged by such a story, the source stated.

    Somewhere around 8 pm, I called the office of AMR chairman and CEO Gerard Arpey. My theory: If no one answers, it suggests absolutely nothing. But if someone answers the phone that late in the evening on a Monday, something is going on.

    So I called Arpey’s phone number. After a ring or 2or 2, a female addressed. “Hello?”

    “Hi, this is Terry Maxon at the Dallas Early morning News. Is Gerard readily available?”

    Long time out. “Can we call you back?” she stated. Oh, sure! I offered her my cellphone number.

    I kept working prospective sources. Over time, I likewise encouraged the night editor over the Companybusiness section, Jeff Schnick, and Business editor Dennis Fulton, as the story tightened.

    Sometime between 8:30 pm and 8:45 pm, I received a call from an AA vice president. What am I preparing to write? he asks. I inform him I’m preparing to compose that American is planning a big announcement Tuesday, amid speculation that it’s going to submitapply for bankruptcy. I likewise said that I plan to hold it off the Web, off Dallasnews.com, up until Tuesday morning.

    Normally, the moment I discovered out enough to publish, I would put it on the Web. However generally when I’m working a big story, I come throughoutdiscover the tracks of other press reporters working the exact same story. In this case, I didn’t discover anybody. So for the last time in my career, I wanted to keep this exclusively in the print editions of the Dallas Morning News.

    I informed the AA VP of my plans. That might have helped the airline company’s choice to coordinate. Possibly a half hour later on, I got another call, this time from the exact same vice president plus a senior vice president.

    Okay, they informed me. You correct. American strategies to submit a Chapter 11 petition Tuesday morning in New York. We talked about it, and I nail down a couple of more information.

    Simply prior toPrior to I disconnected, I kept in mindkept in mind that Gerard Arpey had spoken up numerous times that he didn’t believe bankruptcy was the response.

    Exactly what about Gerard? I asked.

    Time out. Well, intriguing that you ask, they told me. Gerard has decided to retire, reliable Monday night. They guaranteed me that the board advised Gerard to stay, however he had decided it was best to leave. Tom Horton, American’s president, was selecting up Gerard’s titles of chairman and CEO.

    If I had not asked the concern, I would have missed out on half of the huge story. However perhaps one reason these 2 executives chose to call me back is so that the picture could be painted the method they wanted: Gerard left voluntarily instead of being pressed out.

    Well, if he states I’m going to quit if we submitapply for bankruptcy and the board votes to fileapply for bankruptcy, one can argue that’s a de facto termination. But it isn’t, too.

    In any case, the very first the outdoors world knew that American prepared to enter into bankruptcy was when the Dallas Morning News struck the streets (and yards) a couple hours before dawn on Tuesday. CBS National emailed me around 5:30 am and desiredwished to speak to me. Nothing was on the Internet yet, other than other individuals’s stories quoting the DMN story.

    I had actually gone to restfallinged asleep between 1 and 1:30 am and got up around 6 am, about the time AA and AMR were going into US Bankruptcy Court of the Southern District of New York.

    I had actually worked the whole story from my living roomliving-room loveseat. I later counted that it involved about 100 interactions, divided evenly between call, outbound emails and incoming e-mails. (By the method, I never ever changed out of my work clothing till I got readyprepared for bed.)

    One good outcome of the story is that my boy, then 18 years of ages, got to overhear his daddy work a huge story. It provided him a nice gratitude of how a reporter works as he goes from source to source tryingaiming to develop a bit of suspicion into a strong story.

    Our publisher and CEO, Jim Moroney, told me later on that he opened his paper Tuesday early morning and discovered for the firstvery first time that American Airlines was going to submitapply for bankruptcy which Gerard Arpey had actually stopped. He then opened up his other newspapers to see how they handled it. No stories. He looked at our story. “I hope we’re right,” he believed.

    Naturally, the filing introduced dual tracks of news. One was the bankruptcy case itself and the extended procedure of compeling unions to accept new cost-cutting agreements. The other, which started little, became an equally huge story if not larger – United States Airways’ pursuit of a merger with American.

    There were a lot of days where I went house when there were still things to compose. However it ‘d be 10 pm, 11 pm and I needed to choose that that was all I was going to compose that day.

    In the old days (pre-Internet), a reporter worriedstressed over one time a day – due date. It came once a day. You might get a late story into the paper, however there was a limited end to the day.

    The Airline company Biz has no due date, besides right now. So we had the merging of the immediate due date with an insatiable desire for information from airline employees, financiers and others for exactly what was going on in the American Airlines bankruptcy case and US Airways’ pursuit of American. Combined, that meant I felt a responsibility to compose as much as I could about exactly what was going on in the bankruptcy case.

    If nothing else, the experience gave me the opportunity to compose among my preferred leads ever, on the Airline Biz story that heralded the marriage of US Airways and American Airlines on a very, very cold day in December 2013:

    “Those who stated it would be a cold day in hell prior to American Airlines and United States Airways would combine got the weather condition right however the area incorrect.”

    Wipeout: Quiksilver Files For Chapter 11 Bankruptcy In United States

    But the business still sees a future for its core Quiksilver, Roxy womens ware and DC shoe brands.

    It plans to continue in business and filed a comprehensive restructuring plan that calls for financial obligation holder Oaktree Capital Management, an LA firm that focuses on purchasing troubled companies, to become majority owner after leaving bankruptcy.Chief Executive Pierre

    Agnes said the bankruptcy plan is a tough but necessary step that will assist finish a turnaround of the business US company. The companies Asia-Pacific and European business units are not part of the bankruptcy filing.In a statement, Agnes stated the bankruptcy and funding from Oaktree will allow the business to please our continuous responsibilities to clients, vendors and workers and reestablish Quiksilver as the leader in the action sports market.

    Hamptons Bus Service Files For Bankruptcy

    Labor Day has actually reoccured, however right here’s another indicator summer is over: a bus company that transported Manhattanites to the Hamptons has actually filed for bankruptcy.

    The business behind the Hampton Luxury Liner filedapplied for chapter 11 security Tuesday, citing cash-flow problems brought on by Cyclone Sandy. The bus company states in court papers that it lost more than $1.5 million as an outcome of the 2012 superstorm, leading to its eventual default on its loans. Its last forbearance contract is set to expire at the end of the year, and efforts to refinance resulted in the company handling a loan with an interest rate, fees and costs that it says may amount to usury.

    As an outcome of its difficulties, the business states it was “left with no choice but to file the immediate chapter 11 case to manage it the chance to restructure its debt in such a method that it may pay its creditors and remain to operate its company as a going concern.”

    Hampton Luxury Liner provides $45 one-way trips in between New york city City and its cherished summer trip area, the Hamptons, as well as Long Island winery tours. It promotes such contemporary amenities as free Wi-Fi, a library, reclining leather seats, personal power outlets, complimentary treats and water and flat-screen televisions revealing films. According to a 2012 New york city Times review of Hamptons bus alternatives, Hampton Luxury Liner is for “socialites, boldface New Yorkers and any individual else who doesn’t want to be interrupted by an onboard attendantor you, for that matter.”

    The business reported possessions of $6.6 million and financial obligations of $5.1 million in its chapter 11 petition, filed with the United States Bankruptcy Court in Central Islip, NY

    Compose to Jacqueline Palank at�jacqueline.palank@wsj.com. Follow her on Twitter at�@PalankJ!.?.!

    Relativity Postpones 3 Movies Because Of Bankruptcy

    If Relativity Studios was a person, it would really require a hug today. As if their bankruptcy wasnt enough of an obstacle to any chance of continuing to be a Hollywood gamer, the studio has now gone ahead with strategies to get rid of three of their movies from their official release schedule. If you were anticipating The Dissatisfactions Room, The Bronze, or Before I Wake, then it looks like youre going to be sulking in the same corner that Relativity is using up in your regional film theater.

    Range reports that in anticipation of their bankruptcy auction on October 1st, Relativity has chosen to indefinitely hold off release on all 3 films. The main reason all three films were postponed is prettypractically the same factor that the movie Masterminds was pulled out of release last month: Relativity cant pay for to promote any of their upcoming motion pictures appropriately. Whats intriguing is that fellow Relativity release Autobahn is not mentioned in the list of films being temporarily shelved, though one would presume by this point that its just a matter of time prior to that takes place.

    If you readcheck out the details of Relativitys bankruptcy offer, though, theres another, more clear factorreason these movies aren’t being launched. According to formerly reported proceedings, Relativity Studios requireshas to repay the loans they got from financiers like RKA Movie Financing prior to any of these buildings can be offered and appropriately released. The final twist on the whole damned mess is the fact that the moneythe cash that is owed to Relativitys investors which is estimated at around $75 million was for marketing expenditures on their movies, costs that the studio has been implicated of funneling into keeping their own doors open for a little while longer.

    The greatest losers of the fight Relativity Studios is waging are, naturally, the movies that were supposed to have their day in the sun, and the darkness of the theater, and the filmmakers behind them. The Disappointments Room was supposed to be I Am Number Four director DJ Carusos go back to showcase films, and both The Bronze and Before I Wake might have been winners in their own right. Though The Bronze was fulfilledconsulted with combined buzz after it debuted back at Sundance, and Before I Wake honestly resembled a late September non-starter. Well never know how well these movies would have done in their initial release windows, and itll be hard for them to leave the harmed goods track record theyve unintentionally taken on thanks to Relativity.

    Relativity Studios will certainly be on the auction block on October 1st. If youve ever desired to own a motion picturea movie studio, in addition to a starter pack of pre-made films, and have a couple of extra millions sitting around, nows your chance.

    Alpha Natural Resources And Wyoming Regulatory Authorities Reveal Self-bonding OfferHandle …

    Gov. Matt Mead on Tuesday announced the state has reached a deala handle Alpha Natural Resources over the bankrupt coal business reclamation obligations, efficiently ensuring some money will certainly be readily available for clean-up if the miner permanently stops operations. Alpha, which submitteddeclared Chapter 11 defense on Aug. 3, has stated it plans to reemerge from bankruptcy after reorganizing its debts. The company has actually continued to operate throughout bankruptcy procedures. Under the regards to the arrangement, Wyoming would get a $61 million superpriority claim. The classification positions the state at the head of the line of creditors to be paid if the Bristol, Virginia-based business closes its doors for excellent.

    Regulatory authorities, in return, would concuraccept not revoke Alphas permits or seek added funding to cover the expense of cleaning up the business 2 Wyoming mines.

    The offer goes through approval by the US Bankruptcy Court for the Eastern District of Virginia.

    Where Wyoming falls on the list of creditors to be paid has been one of the bigger question marks looming over Alphas bankruptcy proceedings.In May, state regulatory authorities purchased the business develop$411 million in financing to cover its improvement liabilities. The choice came after Alpha failed the financial test to qualify for self-bonding status, a classification that enabled the company to use its own finances as collateral on its cleanup expenses. Business agents and state authorities hailed the deal.

    They stated it would keep Alphas Belle Ayr and Eagle Butte mines open while ensuring money remains in place to cover the operations recovery.”This enables Alpha an opportunity to remainremain in profession,”Gov. Matt Mead said

    in a statement revealing the offer.” The alternative would cost tasks and leave Wyoming taxpayers holding the bag for reclamation. Right here, Wyoming will certainly transfer to the front of the line for a significant part of its improvement claim.” But a landowners group blasted the contract, noting that approximately $350 countless Alphas recovery

    responsibilities stay unsecured.Until bankruptcy and everything else gets completed, it will certainly be the status quo, stated Shannon Anderson, an attorney at the Powder River Basin

    Resource Council.Alpha, in court filings, said its ability to satisfy the$411 million sought by the state was limited. The business kept it could ill manage a surety bond due to the fact that it would be not able to post the required security. Alpha has actually challenged the Wyoming Department of Environmental Qualitys decision that it no longer qualified for self-bonding status. In a filing before the Sixth Judicial Court of Campbell County, the company argued regulatory authorities did not correctly conduct the monetary test used for making their decision. That case was remainedremained at Alphas request after the state and company agreed to enterbecome part of an informal conference about the miners improvement commitments.

    Energy Future Bankruptcy Strategy Attacked Over Fee Payments

    Sept 8 The United States governments bankruptcy guard dog
    blasted a contract aimedtargeted at bringing Energy Future Holdings
    from Chapter 11 since it requires Texass biggest power
    company to pay millions of dollars in fees to lawyers, according
    to a court filing.Energy Future Holdings struck a strategy support agreement in August that binds essential parties to
    interact to end the controversial bankruptcy, which began in
    April 2014. The support contract is aimed to preventing pitched legal battles if the existing bankruptcy exit proposal, based on the
    sale of the Oncor power distribution company, fails.However, the strategy support contract also needs Energy Futures creditors to enact favor of a plan that ensuresoffers millions of dollars(and
    possibly billions) for 45 experts working for undisclosed celebrations, according to the United States Trustee.The United States Trustee is an arm of the Department of Justice, and its legal representatives evaluate the administration of bankruptcy cases.

    Energy Futures bankruptcy exit strategy also contains prohibited arrangements, according to the United States Trustee, consisting of a. management incentive

    plan and legal settlements.Energy Future stated in a different court filing that the. objectors to the plan support arrangement were misreading the. file, which the business stated enabled it to pursue any. proposed offer that was more beneficial to lenders
    . Under the bankruptcy exit strategy, a group of investors. consisting of an affiliate of Hunt Consolidated Inc will finance a.$12.2 billion deal that will certainly offer them control of Energy. Futures Oncor power distribution company.
    The plan has the. support of lenders on Energy Futures generation and retail. energy side of its business, while paying off creditors
    on the. Oncor side.Energy Future was produced from the$32 billion leveraged.
    buyout of TXU Corp, a deal led by the personal equity firms KKR.
    Co, TPG and an affiliate of Goldman Sachs Group Inc. Judge Christopher Sontchi in Wilmington, Delaware will. think about the strategy support contract at a Sept. 17 hearing.Hearings to verify Energy Futures bankruptcy exit plan.
    begin on Nov. 3. The case is Energy Future Holdings Corp, United States

    Bankruptcy. Court, District of Delaware, No. 14-10979.( Reporting by Tom Hals in Wilmington, Delaware; Editing

    by. Christian Plumb)

    Ex-Teen Idol David Cassidy Auctions House After Bankruptcy Filing

    MIAMI – Previous TV star and teenager idol David Cassidy is auctioning off his Florida house on Wednesday after a bankruptcy filing, the separation of his 3rd marital relationship and numerous arrests for intoxicated driving.

    Cassidy, 65, whose hits Cherish and I Think I Love You had teenage women swooning in the 1970s, bought the 7,000 square-foot, five-bedroom waterside house in Fort Lauderdale for about $1.1 million in 2001.

    The as soon as baby-faced star of The Partridge Household TV series invested 5 years refurbishing everything from the stained pine floors to the swimming pool and patio area and setting up heavy wood doors recovered from a taken down Mexican church. Much of the furniture will be consisted of in the auction rate, according to Fisher Auction Co.

    .

    How Detroit Students Experienced The City’s Bankruptcy

    In 2013, Detroit declared bankruptcy. Whats it like when the city you call home goes through severe financial instability, all while youre still attemptingaiming to finish high school? Kassie Bracken, a video reporter for the New York Times, went to Denby High School to find out.

    Detroit’s downtown is slowly enhancing, but simply 15 minutes northeast is Denby. Bracken was struck by the distinction between the gentrifying downtown and the boarded up, deserted houses that sit simply throughout the street from the school. At Denby, she followed five students’ trips to college graduation throughout Detroits monetary chaos.

    Regardless of the citys instability, Bracken discovered that students stayed enthusiastic and enthusiastic. Their courses to college graduation, and their post-graduation plans, took surprising and psychological turns. InspectHave a look at Bracken’s video series below to see each student’s journey:

    Relativity Bankruptcy: NBCU Makes Surprise Appearance On Lender Committee

    On Friday, a United States Trustee revealed the visit of 7 unsecured lenders to an official committee that will certainly be carefully following the Chapter 11 bankruptcy of Relativity.

    Carat U.S.A, the media buying company with a challenged claim of $36.8 million, is obviously on the list, however the greatest surprise is the appearance of NBCUniversal, which wasnt listed as an unsecured creditor in the initial petition.

    NBCU hasn’t yet answered a questions into what it feels it is owed. The possibilities vary from advertising debt to fallout from an arbitration between Universal Studios and Elliot Management, which The Hollywood Reporter exposed in 2013. (Elliot was one of Relativitys earliest backers and Universal was the recipient of a Relativity fund that entered into slate funding.)

    The debt NBCU feels it is owed need to be explained quickly enough, though its most likely to be at least somewhat substantial; the main committee of unsecured lenders is generally made up of the greatest creditors who pickopt to take part.

    The other committee members are Cinedigm Corp., Technicolor, Allied Advertising, Comen VFX and Develop Marketing Group.