Sports Authority's creditors and the Justice Department have challenged the fading retailer's plans to pay top executives as much as $2.85 million in bankruptcy bonuses, Dow Jones Business News reported yesterday. As the liquidation entered its final weeks, Sports Authority unveiled plans for bonuses to four top executives — people that the company doesn't want to name. U.S. Trustee Andrew Vara and lawyers for the official committee of unsecured creditors protested the bonuses and the secrecy surrounding the rewards to top executives. The company contends that bonus money is needed to encourage the executives to do their best in the company's final days, confidentiality is appropriate to protect morale, and prevent competitors from using the pay data to lure Sports Authority's leaders away. Unsecured creditors called Sports Authority's argument about the need to protect morale "ridiculous." In Sports Authority's case, the federal bankruptcy watchdog and the company's own creditors are taking a stand against the confidential treatment of top executive bonuses. Vara cited the presumption of public access to judicial records in arguing that Sports Authority be denied confidential treatment. Creditors earlier moved to have Sports Authority's case converted from a chapter 11 proceeding to a chapter 7 proceeding, and that motion is set for hearing on Aug. 2.
