Mountain Crane Bankruptcy KERP Approval Sought

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Mountain Crane Service filed with the U.S. Bankruptcy Court a motion for authority to implement a key employee retention plan (KERP).

The motion explains, “Under the Debtor’s proposed Plan of Reorganization [Docket No. 169] (the ‘Plan’), the Debtor intends to ‘continue its normal business operations’ and emerge from the Case as a Reorganized Debtor. The Debtor has determined, pursuant to its reasonable business judgment, to implement a KERP for the Controller, particularly in light of the substantially increased workload placed upon the Controller as a result of this Chapter 11 Case and the substantial need to retain the Controller to ensure the Debtor’s success. The Controller is not on the Debtor’s executive management team. The Controller is not an interest-holder in the Debtor.”

In addition, “The Controller has taken on a significant role in the Debtor’s efforts in this case in addition to his normal duties as the Controller for the Debtor, which were already substantial. The Controller’s institutional knowledge has been vital to the Debtor’s success in the early stages of this case, and the Debtor anticipates that the Controller’s skills and knowledge will continue to be a vital part of its ability to confirm its Plan and successfully reorganize….The Debtor has developed the proposed KERP with the goal of providing sufficient incentive for the Controller to stay employed by the Debtor, without paying an amount greater than necessary to achieve that key objective. In doing so, the Debtor has considered, among other factors, the value of the Controller’s services, the potential that the Controller might leave the Debtor absent a KERP, and the financial cost to the Debtor if the Debtor was required to attempt to replace the Controller….Under the KERP, the Debtor seeks approval to pay the Controller a one-time payment of $22,000 (the ‘KERP Payment’) on December 31, 2018. The Controller’s annual salary is $88,000. Thus, the KERP Payment is approximately equivalent to three months of the Controller’s annual salary.”

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