Objectors line up to challenge P'tex payouts
September 5, 2003-- Home Textiles Today,
Wilmington, DE — Today's deadline for objecting to the Pillowtex Key Employee Retention Program has been extended by the federal bankruptcy court until Monday, Sept. 8, as creditors, the company’s union and a newspaper prepare arguments for a scheduled hearing this Friday.
In the meantime, informal conversations between Pillowtex and the unsecured creditors’ committee are continuing, aimed at better defining the plan and the roles of specific recipients in the bankruptcy liquidation process, according to one of the attorneys involved.
By midday Friday only Knight Newspapers, owner of the Charlotte (NC) Observer, had actually filed a challenge to aspects of the plan. But attorneys for the unsecured creditors and UNITE, Pillowtex’s union, said in interviews that their objections were in preparation and would be filed shortly. The newspaper was challenging the plan’s filing under seal in which employees’ and executives’ named were redacted from the public record, citing, among other things, the public’s right to know and the First Amendment.
“It’s too much money,” said Mark Power, a partner with Hahn & Hessen, New York, representing the creditors’ committee. “It doesn’t appear to be properly structured to incentivize performance. It doesn’t appear to structure the awards to specific individuals who are crucial to the liquidation process in that the pool [of 143 recipients] appears too large. It’s definitely too rich. And some of these people appear to be rewarded for simply being there.”
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