Bankrupt Hertz seeks $5.4M in government bonuses

Just months after Hertz International Holdings Inc. shelled out $16.2 million in additional shell out intended to retain executives from leaving as the coronavirus pandemic decimated the travel field, the car rental corporation needs to pass out $14.6 million a lot more in bonuses.

Prior to submitting for Chapter 11 bankruptcy in May, the company laid off countless numbers of staff while handing out retention bonuses or “stay pay” to leaders.

HERTZ Bought $29 MILLION IN Stock Just before SEC STEPPED IN

At the beginning of the month, the corporation lifted $29 million, marketing its possible worthless inventory before regulators at the Securities and Exchange Commission lifted issues.

In accordance to a Saturday report in The Wall Road Journal, retention payments are nearly unattainable for executives after a company files for bankruptcy.

Although Hertz is concealing much of the details about which staff members will get the hottest round of funds, Chief Fiscal Officer Jamere Jackson resigned this month and forfeited his stipend.

Styled as “incentive” bonuses in court documents submitted Thursday, the new spherical of payouts would have to be approved by the choose overseeing Hertz’s bankruptcy.

In the proposal, the chief executive officer and 13 other prime professionals of Hertz Corp. would share as a great deal as $5.4 million, Bloomberg claimed Saturday.

If the choose enables a next bonus round, the Journal notes that Main Govt Paul Stone — who took the title and a $700,000 “retention bonus” in Might — could be entitled to an further $1.6 million.

Hundreds of staff members below Stone could also be supplied income underneath the incentive ideas, with executives and senior management acquiring payments in the range of $10,000 to $15,000.

When “retention” bonuses were being banned by Congress 15 years back, bankruptcy legal professionals began crafting incentive packages to maneuver all around the ban.

Functionality benefits have considering that been routinely authorized — in lots of cases, over the protests of federal personal bankruptcy watchdogs.

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In 2020, the CEOs of GNC Holdings Inc., Ascena Retail Group Inc., Personalized Makes Inc., J.C. Penney Co., Neiman Marcus Team Ltd., and other companies have gained this sort of payment under comparable situations.