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The bankruptcy judge approves Purdue Pharma's $ 7 million executive bonus plan



(Reuters) – Purdue Pharma, the bankrupt manufacturer of OxyContin painkillers, on Monday received court approval to pay up to $ 7.1 million in incentive payments for five top executives if they meet certain targets, despite opposition from US lawyers. [19659002] USA Bankruptcy Judge Robert Drain in White Plains, New York, signed the executive incentive plan at the end of a virtual hearing.

His verdict comes about two weeks after he said he would approve Purdue's reorganization plan, which rests on a $ 10 billion settlement of opioid – related litigation.

The judge repeatedly said during Monday's hearing that he did not consider incentive payments to be "bonuses" because even if they were paid in full, managers would still only fall in the middle of the total compensation range for managers at large pharmaceutical companies. Incentive payments, he said, are essentially part of managers' salaries, he added.

"It's easy ̵

1; too simple indeed – to say that an incentive program is always a bonus," Judge Drain said.

“Undoubtedly, my judgment will be interpreted by some as authorizing large bonuses for managers. I do not think that is actually the case here, he added. "A bonus is something you get in addition to median compensation."

He rejected an argument from the US Department of Justice's bankruptcy trustee, the US trustee, that Purdue did not show that the 2021 incentive plan is really an incentive, rather than a bonus for managers who simply show up at work. The US trustee often objects to bonuses for managers in companies that are bankrupt.

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