October 26, 2016
Partners Eric R. Wilson and Jason R. Adams and associate Lauren S. Schlussel were mentioned in the Law360 article, “US Trustee Seeks To Chop Garden Fresh Sale's Bonus Plan,” as counsel to Garden Fresh Restaurant Intermediate Holding LLC’s official committee of unsecured creditors. The parent company of casual dining chain Souplantation filed for Chapter 11 with approximately $200 million in debt citing reluctance from consumers to eat out, changes in dining habits and increased employment costs.
In Delaware Bankruptcy court, the U.S. Trustee’s office recently objected to Garden Fresh’s auction plans that include a provision to have the purchaser provide at least $400,000 in bonuses for executives. Under bankruptcy law, debtors are prohibited from paying company insiders a bonus simply to retain their services through the Chapter 11 process. The official committee of unsecured creditors also objected to the auction plan, saying that it is essentially a credit bid that does not leave the company with enough money to operate its business and may render the bankruptcy estate unable to pay its bills.
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