While record numbers of Americans file for unemployment — and others find themselves unable to get through to unemployment offices — Fairway would like to take this time to reward its executives. In a bankruptcy court, the company argues its $2.3 million in executive bonuses are well deserved. This is because it’s super hard to operate a grocery chain during the coronavirus crisis, especially after running it into the ground beforehand.
Fairway filed for Chapter 11 bankruptcy in February — which feels roughly like ten to 12 years ago — after a long and painful collapse. While the company sold its five Manhattan stores, it’s since been trying to find a suitor for other locations. In the motion filed in bankruptcy court on Wednesday, Fairway argues “news reports of the danger of non-remote work has made finding replacements an unprecedented struggle.”
The company asked for permission to pay nine senior executives $1 million in payments as part of a “key employee incentive plan,” and 25 employees $1.3 million in payments, as part of a “key employee retention plan.” Five employees who were paid under KERP have apparently left the company, and Fairway’s leadership fears losing more employees when they’re already keeping trim.
Last month, the U.S. Trustees Office objected to the executive bonuses, saying the benchmarks were not difficult enough to justify them. The United Food and Commercial Workers had filed an objection as well, but Fairway says they reached an agreement as part of a $70 million pension settlement. Fairway’s particular challenge is that the $70 million bid from Village Super Market for its Manhattan stores requires those stores to remain open.