Gymboree Group Inc., which is closing more than 700 stores after filing for bankruptcy for the second time in two years, wants to pay up to $2.2 million to about 50 key employees, but a federal watchdog says the compensation might not be fair or reasonable, WSJ Pro Bankruptcy reported. The U.S. Trustee’s office, an arm of the Justice Department that monitors the administration of bankruptcy cases, is challenging the proposed incentive and retention plans for executives who the children’s clothing retailer believes are critical to helping it wind down its business. John P. Fitzgerald III, acting U.S. Trustee for the region that includes the U.S. Bankruptcy Court in Richmond, Va., filed an objection on Tuesday, noting that, as hundreds of stores close and thousands of hourly employees are expected to lose their jobs, Gymboree wants to pay bonuses or severance to 52 employees. Gymboree is conducting store-closing sales for, and winding down, all 264 remaining Crazy 8 locations and all 485 remaining namesake Gymboree store and outlet locations.
