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Pliant May Test Limits Of Executive Bonus Plans

Law360 (June 8, 2006, 12:00 AM EDT) -- Some creditors for bankrupt food packaging company Pliant Corp. are crying foul on the executive bonus plan found in its proposed reorganization, arguing the incentives are tantamount to retention bonuses banned by recent revisions to bankruptcy law.

Pliant's ad hoc committee of second-lien noteholders voiced its concerns in an objection to the company's amended reorganization plan, in which it argued that the so-called emergence-bonus payments to “insiders” violate U.S. Bankruptcy Code.

Schaumburg, Ill.-based Pliant filed for Chapter 11 protection on Jan. 3 in the U.S. Bankruptcy...
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