Several years ago, I bought a big chunk of 'distressed' debt in a major company and landed on the creditors committee when it filed for Chapter 11. Shortly thereafter, the bankers who were hired by senior management told me that I would have to pay retention bonuses to keep its top managers from leaving.
The company, they warned, would crumble if these star managers left. Nine had already threatened to march out the door if they didn't get substantial bonuses. I told them I was fed up with retention bonuses. Where was the line waiting to hire these "star" managers who were responsible for bankrupting the company in the first place?
So I flatly refused. After much argument, the company's lawyers and bankers said, let's take it to the bankruptcy judge.
The judge said, "Mr. Icahn, why don't you want to pay retention bonuses?"
"It's simple, your honor," I replied. "It's because I don't want to retain them!"
"Hmm, good point," the judge said. "You win."
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The company, they warned, would crumble if these star managers left. Nine had already threatened to march out the door if they didn't get substantial bonuses. I told them I was fed up with retention bonuses. Where was the line waiting to hire these "star" managers who were responsible for bankrupting the company in the first place?
So I flatly refused. After much argument, the company's lawyers and bankers said, let's take it to the bankruptcy judge.
The judge said, "Mr. Icahn, why don't you want to pay retention bonuses?"
"It's simple, your honor," I replied. "It's because I don't want to retain them!"
"Hmm, good point," the judge said. "You win."
Read the complete article
