USEC Paid $15M In Bonuses Just Before Ch. 11, Docs Show
Nuclear fuel provider USEC Inc. paid more than $30 million in bonuses and other compensation to high-ranking executives and bankruptcy advisers before filing for Chapter 11 protection earlier this year, according to documents filed Friday in Delaware federal court.
The expenditures were revealed in financial statements provided to the court, where the Maryland-based company is attempting to reorganize itself and shed some of its estimated $1.07 billion in debt.
According to the statements, the company devoted $15 million to its executives in the year prior to its bankruptcy filing in March, mostly in the form of bonuses. The largest allotment was to President and CEO John K. Welch, who took home approximately $3.7 million.
The filings also show that it spent around $16 million on lawyers and other advisers who served in consulting roles as the company explored its bankruptcy options and prepared its filing.
USEC spokeman Paul Jacobson said the bonuses were handed out mostly due to a temporary change in the company's pay structure to focus on rewards for completing short-term goals, which was necessitated by a "series of critical short-term challenges" that threatened its long-term future.
"As part of this temporary change, executives gave up significant amounts of long-term compensation. The payments are within the industry norms for a company with more than $3 billion in revenue during the past two years," he said.
Jacobson added that many of the payments were actually made in 2012 but disbursed in 2013, and that about $5 million of the bankruptcy expenses was for attorneys and advisors for the company's creditors.
In its Chapter 11 petition, USEC claimed $70 million in assets against the more than $1 billion in liabilities as of Dec. 31.