Riverstone bonus program approved
A Delaware bankruptcy judge Tuesday approved Riverstone Networks’ request to hand out as much as $5 million in performance bonuses to top executives and key employees with a few strings attached.
The spinoff company of the former Cabletron Systems has argued that continuing the bonus program was necessary to maintain employee morale in the midst of its bankruptcy sale to Lucent Technologies for $207 million.
Judge Christopher Sontchi, who is handling his first bankruptcy case, said in his ruling that such arguments constitute “good and sufficient cause” without elaborating on his decision. The bonus program includes some $3 million for mid-level employees and $1.3 million to top executives, plus an additional $750,000 in discretionary bonuses handed out by CEO Oscar Rodriguez.
Dissident shareholders and the Official Committee of Equity Shareholders raised some concerns about the bonuses, wanting to know how the level of performance is measured.
The Lucent sale is expected to close on Monday, April 4. – BOB SANDERS