U.S. trustee objects to Nortel incentive plan

Mon Jan 7, 2013 11:26am EST
 
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* Company seeks bonuses for 10 employees

* U.S. trustee says plan lacks details

* Mediation begins Jan. 14 to resolve bankruptcy

Jan 7 (Reuters) - A U.S. trustee has objected to Nortel Networks Inc's plan to offer $1.8 million in bonuses to employees as the once-mighty telecommunications company nears critical mediation talks to resolve its four-year bankruptcy.

Nortel last month asked the U.S. Bankruptcy Court in Delaware to approve incentive payment plans that could reward 10 employees for taking on broader responsibilities if certain restructuring targets are met.

The U.S. Trustee for Region 3, Roberta DeAngelis, objected to the proposal because it does not provide details on the employees expanded roles and does not disclose individual performance targets.

The U.S. Trustee, an agent of the Department of Justice who oversees bankruptcy cases, also said the bonuses equal at least 100 percent of the regular pay for each employee.

James Bromley of the law firm Cleary Gottlieb Steen & Hamilton, who represents Nortel, did not immediately respond to a request for comment.

Nortel has proposed incentive bonuses potentially worth $1.08 million for seven unidentified employees. Separately, Nortel proposed a bonus plan worth a total of $774,750 for Timothy Ross, the chief financial officer, Allen Stout, the controller and Luis Guerra Sanz, who is leading the company's liquidation.   Continued...