Pre-bankruptcy payouts under fire from government watchdog

Flailing retailers have paid many millions in retention bonuses to executives in the months and even days before a Chapter 11 filing.

What happened

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Why it matters

Pre-bankruptcy bonuses have become so commonplace that they are often an indication that a Chapter 11 is imminent. Retail likely accounts for an outsized share of such bonuses, for the simple reason that the retail represents the most bankruptcies of any other industry except the oil and gas field, according to Debtwire data.

The retailers listed above each paid millions in retention bonuses to key executives in the months, weeks or even days before filing.

J.C. Penney, for example, paid $10 million in retention bonuses to top managers just days before the company filed. That included more than $4 million to then-CEO Jill Soltau, who would go on to leave company shortly following its acquisition by Simon Property Group and Brookfield Asset Management later in the year.

This news brief is based on reporting published by Retail Dive on 2021-10-04. The original report is linked below.