bankruptcy bonuses

Executive bonuses at opioid firm Endo were ‘excessive’ and ‘secret’ before bankruptcy, state AGs say

Seven state attorneys general and a court-appointed bankruptcy federal watchdog are opposing up to $94 million in pre-bankruptcy bonuses paid to top executives and other insiders at opioid drug firm Endo International in Chester County, court documents show.

The bonuses to the highest executives were doled out in “secret” and drain financial resources of the money-losing Endo available for victims of the Malvern company’s addictive pills, according to state attorneys general who filed their objections as a committee on Wednesday in New York.

Pennsylvania Attorney General Josh Shapiro is one of the seven whose court filing called the top executive pre-bankruptcy bonuses “excessive.”

Endo, facing mounds of litigation over its alleged role in the national opioid crisis, filed for bankruptcy protection on Aug. 16. The Inquirer first reported on the bonuses days later.

U.S. Trustee William Harrington, the watchdog, said in a separate court filing earlier this month that Endo paid $94 million in bonuses to top executives and other insiders in the months prior to the bankruptcy filing, while Endo’s restructuring plan leaves only $27.4 million initially for individual opioid victims who are not state entities.

Endo has “provided virtually no information, much less sufficient information” to evaluate the

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Revlon executives to get up to $36M in bankruptcy bonuses

“In fact, the metrics imposed are indeed tall orders and serious challenges,” Jones said. “They will require the senior executive team to not only work hard, which I have no doubt they’re doing, but also work extremely effectively, probably creatively, and in ways I don’t even know.”

Bankruptcy bonuses are commonly ladled out by ailing companies to top management shortly before or soon after filing for Chapter 11 protection. In 2005 Congress amended the bankruptcy code and aimed to rein in “retention bonuses” doled out to executives simply for staying on the job. Companies responded by labeling payouts as “incentive bonuses” and tied them to financial goals that could benefit the reorganization.

But critics say the goals are typically easy to meet and amount to backdoor executive payout schemes at companies scrambling for every dollar.

Nonetheless, judges typically approve bankruptcy bonuses because they feel doing so will maximize value going forward, even if the bonus recipients are the same people who led the company into Chapter 11.

“It is a tricky thing to explain how and why you need your senior management team to stick around,” acknowledged Jones, who drew comfort from the fact all of Revlon’s creditors support its

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