Bankrupt Philadelphia refiner seeks $2.5 million for second round of executive bonuses
Philadelphia Energy Solutions Inc. oil refiner is seeking at least $2.5 million to give as bonus payments to its top executives as part of plan in reorganizing or selling the company after filing for bankruptcy earlier this year.
US bankruptcy court filings show that PES executives were already paid almost $4.5 million in retention awards after the massive fire in June that resulted to the shutdown. PES sent home hundreds of workers without any pay or benefits after the fire.
The second round of bonuses would be paid if PES agrees to reorganize within 15 months after its bankruptcy filing in July.
The $2.5 million could also be granted if the company insures at least $300 million in net proceeds from insurance proceeds, sale, or other payments, as shown in the documents with the US Bankruptcy Court for the District of Delaware.
The second round of bonus is set to be divided into: 29% to Chief Executive Officer Mark Smith, 25% to board of directors Chairman Mark Cox, 18% to Chief Financial Officer Rachel Celiberti, and 14% to attorney Anthony Lagreca. Three PES employees would receive a small portion of the amount.
PES executives are required to supervise the bankruptcy and sale process, manage the idling plant, and seek insurance proceeds, among other work, according to the court filings. Attorneys noted that these duties “go well beyond the demands of their day-to-day jobs.”
A union where 640 local members worked at PES called the United Steelworkers International are planning to raise their objection to the bonus.
“The thought that they need millions of dollars of new bonuses to work diligently towards a sale of the refinery is offensive,” said USW President Thomas Conway.
PES declared bankruptcy on July 21, followed by the shutting of its last crude distillation that month. The refinery had been put on sale right after, attracting interest from biofuels producers and real estate developers.
The refinery fights for as much as $1.25 billion in insurance proceeds regarding business interruption and damage caused by the June fire.