Glass tableware maker Libbey Inc. filed for chapter 11 bankruptcy protection after paying millions in retention bonuses to top brass and laying off the bulk of rank-and-file employees in the U.S., WSJ Pro Bankruptcy reported. The 202-year-old Toledo, Ohio, company sought chapter 11 in U.S. Bankruptcy Court in Wilmington, Del., blaming the Covid-19 pandemic for causing a sharp drop in revenue. But Libbey, which recorded a loss of $65.2 million last year on sales of $782.4 million, was in trouble long before the pandemic. Its business was hurt by global competition across all its distribution channels and slowing economies in Europe, China and parts of Latin America, among other factors, according to court papers. The company was unable to refinance a $440 million loan and had started working with Latham & Watkins LLP and Lazard Frères & Co. on restructuring options, according to a court filing by Brian Whittman, a managing director at restructuring adviser Alvarez & Marsal. Libbey employs more than 5,500 people, about 70 percent of them outside the U.S. Because of the pandemic, the company laid off most of its roughly 1,000 U.S.-based hourly workers in March and furloughed about 280 salaried employees in April and May. The company halted production at its Toledo and Louisiana plants and closed its two U.S. retail stores in response to the outbreak. A limited number of furloughed employees have begun to return to the plants and retail stores as restrictions are beginning to be lifted, Whittman said. Before filing for bankruptcy, Libbey paid about $3.1 million in retention bonuses. Most of the cash, $2.35 million, went to four top executives, including $900,000 for Chief Executive Mike Bauer. The balance of $750,000 was earmarked for 16 noninsider — or lower-level — employees.
