Executives at Tops are going to be getting ‘friendly’ bonuses, despite the grocery chain shedding unprofitable stores.
Two of those stores are local, and closure will have an impact on the local economy.
The news came over the summer – when it was announced that Geneva and Lyons locations would be shuttered by late-November. Weeks later, a WARN notice to the state indicated that 492 employees would lose their jobs in the Rochester/Finger Lakes area.
For Geneva and Lyons – it was roughly 150 less jobs.
Now, four months removed from the troubled chain scrapping plans to pay $3.6 million in bonuses to CEO Frank Curci and four other high-ranking executives – the proposal has made its way back into possibility.
The difference: This time, the bonuses would be paid after the company emerges from bankruptcy, possibly as early as November, rather than during the bankruptcy process itself.
That’s an important point, per experts, because it would require that the company comply with federal bankruptcy laws if the bonuses were considered during the process. Once Tops emerges – they will be free to operate as desired on that front.
For the executives – this could be an even better outcome, though.
The new plan would also grant Tops executives 10 percent of the stock in the newly-reorganized company. Those shares could turn out to be valuable if Tops is able to emerge and become profitable.
Of course, the $3.6 million would be back on the table.
Tops representatives say the $3.6 million isn’t tied to performance of individual stores.
Michael Buenzow, Tops’ chief restructuring officer, said this spring that initial bonus plan was “essential” to the company’s reorganization efforts by creating incentives to keep employees from leaving and rewarding them for doing a good job.
The supermarket chain’s reorganization plan will reduce Tops’ debt, which exceeded $700 million at the time the company filed for bankruptcy in February, by $455 million. The company’s interest payments on that debt, which reached $80 million a year before the bankruptcy filing, will be reduced by about $36 million, according court documents. And Tops will save about $27 million after renegotiating some of its store leases.
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Reporting in this story by News Director Josh Durso. He hosts #InsideTheFLX on FingerLakes1.TV and FL1 Radio. He produces FingerLakes1.com’s weekly ‘Sunday Conversation’ taking a deeper look into the headlines. Email tips and leads to [email protected]. |
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