Philadelphia Energy Solutions paid out about $4.6 million in retention bonuses to eight key executives after a devastating June fire closed the giant Schuylkill River refinery complex, but before the company declared bankruptcy, court records show, the Philadelphia Inquirer reported. Most of the payments were made on July 5, while PES was in the process of closing the East Coast’s largest refinery, according to a filing with the U.S. Bankruptcy Court in Delaware. At the time, the refinery had announced plans to permanently shut the fuel complex and lay off most of its 1,100 employees without severance pay or health insurance coverage. The payments were disclosed in financial documents filed on Friday with the court. “Key employee retention bonuses are not that uncommon in bankruptcy, but it is uncommon to pay them before bankruptcy knowing that you’re going to go into bankruptcy," said Prof. Jonathan Lipson of Temple University’s Beasley School of Law. Such bonuses might be challenged by a committee of unsecured creditors, or by a bankruptcy trustee if one is appointed. The retention bonuses paid by PES were not included in a formal plan submitted to the court, but listed without comment in a 204-page financial report submitted to the court.
