Sports Authority Execs Sought Nearly $3M in 'Bankruptcy Bonuses'

Not so fast, says judge
By Michael Harthorne,  Newser Staff
Posted Aug 3, 2016 4:47 PM CDT
Four Sports Authority executives wanted nearly $3 million in bonuses despite the bankrupt company laying off approximately 14,000 employees.   (AP Photo/David Zalubowski)

(Newser) – A bankruptcy judge is "not surprised" some of the 14,000 or so employees who lost their jobs when Sports Authority shut down are "sending angry emails" after four top executives sought nearly $3 million in bonuses, the Wall Street Journal reports. Judge Mary Walrath says it would be "inappropriate" to give bonuses to executives "when all the employees are losing their jobs." She ruled against the bonuses Tuesday. According to Reuters, Sports Authority was seeking to pay the four executives $2.85 million on bonuses as an incentive to make sure they stay on budget while moving through the final stages of bankruptcy. It also wanted to keep the identities of the executives a secret to "minimize detrimental impacts on employee morale."

Sports Authority filed for bankruptcy in March and—after failing in a plan to keep some of its stores open—closed its final locations last month. So-called "bankruptcy bonuses" are a regular occurrence for failing businesses, CBS News reports. Executives believe they deserve a little something extra for their expertise in guiding a company through its final days. A 2012 study found that executives at 21 companies that recently filed for bankruptcy received more than $350 million in bonuses, salary, stock grants, and severance. (Read more Sports Authority stories.)

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