Residential Capital LLC, the bankrupt former mortgage company, won court permission to pay as much as $7.8 million in bonuses to employees, with almost half the money potentially going to eight top executives.
U.S. Bankruptcy Judge Martin Glenn in Manhattan approved the bonus plans today, over the objection of the Office of the U.S. Trustee, which monitors corporate bankruptcies. The trustee had argued that it was unfair to have such a large share of the bonus pool going to a handful of the executives.
In his opinion, released today, Glenn said he gave the plan “close scrutiny” because of the high percentage going to the executives. He concluded the potential payments were necessary “in light of the complexity and challenges of the tasks remaining to be done, and the importance of executive leadership in achieving the goals that have been set.”
The three bonus plans cover more than 160 remaining
Six other executives would collect as much as $2.52 million. About 155 other employees are also eligible for bonuses.
ResCap, based in New York, filed for bankruptcy in May with plans to sell most of its assets and resolve legal claims related to residential mortgage-backed securities. The company is owned by Detroit-based auto lender Ally Financial Inc.
