ResCap Trustee Says $18M Employee Bonus Plan Is Unlawful

Law360, Los Angeles (August 2, 2012, 5:15 PM EDT) -- The U.S. bankruptcy trustee for Residential Capital LLC objected to the troubled mortgage lender's plan to pay nearly 200 employees and executives up to $18 million in bonuses, saying the payments constitute an unlawful retention program.

Trustee Tracy Hope Davis said the proposed bonus package, which ResCap characterized as an incentive program, doesn't comply with bankruptcy law because it sets low performance benchmarks and rewards company insiders for staying with the company.

“The [plan] is a disguised retention plan, not an incentive plan, because it sets...
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