WHITE PLAINS, N.Y. — The judge in A&P's bankruptcy case on Thursday approved a short-term incentive plan for the company's top employees.
The plan was revised from an earlier iteration that had been rejected by the same judge in March. Judge Robert Drain of the U.S. Bankruptcy Court here said that charges to the plan that incorporated EBITDA targets helped gain support for the plan from the creditors' committee, which had previously objected.
A lawyer for the creditors testified that a recent review of a 2011 business plan helped to change their position.
The approval came despite an objection from the United Food and Commercial Workers union, which is scheduled to begin labor negotiations with A&P May 5.
The revised incentive plan would provide A&P's top executives with up to $3.7 million in performance bonuses.
The judge also approved bidding procedures for A&P's sale of 25 SuperFresh stores, despite limited objections by two landlords and by the United Food and Commercial Workers union, which sought to have its rights reserved specifically as part of the sale.
A&P said last month it would seek to sell the stores, located mostly in Maryland, Washington, D.C., and Delaware, because they no longer fit in the retailer's core marketing area. An auction is set for May 17.
In other matters Judge Drain granted Grocery Haulers Inc.'s request to remain in its truck terminal owned by A&P until June 30. GHI, which provided trucking services for A&P's Pathmark stores until its contract was rejected by the retailer earlier this year, said it needed the time to wind down its operations at the facility, which A&P is seeking to lease to another user.
Drain however ruled against Grocery Haulers in a separate request to have an automatic stay modified so it could commence legal action against A&P. In this matter, GHI argued that A&P could be liable for charges of violations of the WARN Act against GHI by union employees let go in the aftermath of the A&P rejection. Drain, however, said the matter could be moot if GHI wins the case brought by its former workers.