The committee of unsecured creditors did not object to a $100,000 a year pay increase for O'Sullivan Industries interim CEO Rick Allan Walters, according to a transcript filed today in Bankruptcy Court for the Northern District Court of a Dec. 14 court hearing.
Walters took the reins of the troubled company after million-dollar CEO Bob Parker took a leave of absence for medical reasons.
In November, O'Sullivan asked for permission to increase Walters' salary from $250,000 to $300,000 a year.
Walters, who previously worked for Parker at the Sharpie/Calphalon group of Newell Rubbermaid from 2001 to 2004, "has been instrumental in implementing cost-cutting measures and strategic initiatives on behalf of the debtors, including the creation of a new sales and marketing organization, the expansion of new product lines, and the enhancement of sourcing opportunities from abroad," according to court documents filed in connection with the pay increase request.
"Moreover," it continued, "since the petition date, Mr. Walters has been involved in every aspect of the debtors' bankruptcy cases, including formulating the debtors' business plan and in obtaining post-petition financing."
The documents said Walters' duties have been increased since Parker went on leave. "Among other things, he now has the primary responsibility for maintaining and strengthening the customer and supplier relationships that are the lifeblood of the debtors' business, as well as for maintaining employee morale and confidence."
In a portion of the documents,O'Sullivan officials laid out their justification for the increase in Walters' salary. "There are sound business reasons to pay Mr. Walters an increased salary to serve as interim CEO. Without an acting CEO at their helm, the debtors could lose essential customer and supplier support.
"Given his qualifications, experience, and knowledge about the debtors' business, Mr. Walters is the logical choice for interim CEO. Among other things, he is in the best position to continue maintaining and cultivating the customer and supplier relationships vital to the debtors' business and their ability to maximize the value of their estate, as well as interfacing with employees and preserving their morale and confidence during the restructuring process."
The document continues, "The debtors believe that the relatively modest increase in Mr. Walters' salary (he would not receive any other additional benefits) would be far less than the costs associated with retaining an executive search firm to locate an outside interim CEO who, in all likelihood, (1) would not be hired in a position to manage the debtors' business for weeks or even months, (2) would not have the strong customer, supplier, and employee relationships that Mr. Walters has, and (3) would require a substantial salary- particularly for what may be a temporary assignment."
The documents do not mention that Walters is already virtually guaranteed a $200,000 bonus in addition to his $250,000 salary.
Of course, Walters "relatively modest increase" comes at a time when many of the company's Lamar workers are losing their livelihood.
8 comments:
Has he really helped the morale of the employees????L
Those bankruptcy documents are always filled with irony, aren't they?
I don't understand how they can "not object". My GOD, you are in bankruptcy court! This should be a time for cutting cost not finding new ones. Oh wait, I guess they "laid off" enough employees to make up that 100 grand.
Hes in charge of morale .. hes not doing his job. morale at the big o is way down. The big wigs want more money . try giving some of that money to your employees. that would boost morale.
with each person they let go the employees have more added to thier job and i don,t see them offering us any more money for our extra duty
Walters doesnt care about employee morale - how many times has he been to the Lamar plant? All these top 22 employess care about is lining their pockets at the expense of the plant workers. Could it be that the judge is employee #22?
If all this is true, why hasn't somebody got a hold of 20/20 or Dateline or 60 Minutes. Someone that might really look into it? This (I think would make some good NEWS)Would make some good news.
O'Sullivan is penny ante stuff for major new outlets. fact is, this happened all the time in bankruptcies of corporations. That is part of why the bankruptcy laws were changed (and why OSU filed before the effeective date of that change). You might be able to find a local reporter who would take it on as an example of "the rich getting richer". Sad to say, this won't show on most non local radars.
It is interesting that these people who they cite as critical to the future of OSU are the same guys who drove it down to the levels it is now and moved the headquarters to the pleasure palace in Atlanta.
If the creditors who end up owning this knew what they were doing, they would kick that bunch of bums out and probably close the South Boston facility. Lamar could handle all the business in the plan well past 2010.
My two cents wort...
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