CBL employee retention program OK’d, despite U.S. trustee objection

By Sarah Lizee

Olympia, Wash., Feb. 1 – CBL & Associates Properties, Inc.’s motion to implement a non-insider key employee retention program was approved Friday by the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, Region 7 U.S. trustee Kevin M. Epstein filed an objection to the motion on Thursday.

The debtors sought approval of the tier 2 pre-petition key employee retention program to pay retention bonuses to 155 key employees. The aggregate cost of the KERP is $4.9 million, $2.45 million of which was paid in the first installment prior to bankruptcy.

Epstein had said the court should deny the motion unless the company can demonstrate that all 155 employees are not insiders.

“The debtors have not met their burden here,” the U.S. trustee said in his objection. “Simply put, statements in the motion that none of the KERP participants are statutory ‘insiders’ do not provide this court with an evidentiary basis to make a conclusion on the status of these individuals.”

CBL is a Chattanooga, Tenn.-based owner and developer of malls and shopping centers. The company filed Chapter 11 bankruptcy on Nov. 1 under case number 20-35226.

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