A bankruptcy judge has greenlighted multimillion-dollar bonuses for Windstream‘s top executives as the company continues working through chapter 11 bankruptcy.
This week, U.S. Bankruptcy Judge Robert Drain approved Windstream’s proposed 2020 executive incentive plan. David Avery, Windstream’s vice president of corporate affairs, tells Channel Partners that the plan is similar to the performance incentive program used by the company prior to filing for restructuring.
In addition, the court has to approve the incentive program since Windstream is in restructuring, he said. The bonuses aim to drive business performance.
Windstream filed for chapter 11 last February
Under the plan:
- Tony Thomas, Windstream’s president and CEO, could receive as much as $9.5 million.
- Robert Gunderman, chief financial officer and treasurer, could receive as much as $3.5 million.
- Layne Levine, president of enterprise, could receive nearly $2.3 million.
- Jeffery Small, president of Kinetic, could receive more than $2.1 million.
- Kristi Moody, executive vice president-general counsel and corporate secretary, could receive more than $1.4 million.
According to the court filing, Windstream has faced “severe business pressures as a function of the highly competitive landscape for telecommunications providers generally, as well as the challenges inherent to operating any business in chapter 11.” Additional challenges result from media coverage of Windstream’s litigation with Uniti and its reorganization, as well as supplying critical communications and support services to end users such as hospitals, municipalities and schools, it said.
“Such end users, due to a lack of familiarity with the chapter 11 process, may continue to be cautious about engaging with [Windstream], despite the fact that [its] ability to operate has been unimpaired by these chapter 11 cases,” it said.
To date, the executives have met these challenges, and have directly engaged with vendors and services providers to “maintain stability and seamless performance” across Windstream’s businesses, according to the filing. The performance targets will require the executives to continue to “manage through” the chapter 11 filings, it said.
Windstream faces an April deadline to complete its reorganization plan and exit bankruptcy. Drain rejected its request for an extension to May 31 to file its plan.
A major holdup in the process is Windstream’s ongoing court battle with Uniti, the publicly traded real estate investment trust (REIT) consisting of network assets that Windstream divested in 2015. Windstream pays Uniti about $650 million annually to use its network, and wants to modify its agreement.
Windstream filed suit against Uniti in July over its annual payment. A trial is scheduled for March 2 in federal bankruptcy court.