Hechinger gets go-ahead for plan to keep workers

Troubled chain to spend $6.3 million on bonuses, benefits

August 31, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

A U.S. bankruptcy judge has approved Hechinger Co.'s plan to spend $6.3 million to retain more than 12,000 employees, the Largo-based home improvement retailer said yesterday.

The troubled chain, which filed for Chapter 11 bankruptcy protection June 11, said its plan covers all employees -- except senior managers -- who work at its remaining 117 stores, the headquarters in Largo and a support services building in Virginia Beach, Va.

Under the plan, employees will receive retention bonuses and sales achievement incentives. The plan does not cover employees at 89 stores that Hechinger is closing, said Sean Flynn, a company spokesman. Those locations, which include a mix of Hechinger and Builders Square stores, are liquidating their inventories, he said.

The plan includes improved severance benefits, which would be paid to employees if layoffs occur at the 117 stores during the Chapter 11 reorganization, Flynn said. No further layoffs are planned, he said.

"Maintaining our experienced, quality work force is crucial as we strive to move forward," Richard J. Lynch Jr., Hechinger's chief executive officer, said in a statement.

A judge in U.S. Bankruptcy Court for the District of Delaware in Wilmington, Del., gave verbal approval to the plan Friday. Flynn said he would have no further details on when bonuses or incentives would be paid or how the company would award benefits until the judge signs the final plan.

"The largest factors are the individuals' position with the company, their time with the company and the status of the Chapter 11 case during the time of any benefit," Flynn said.

He said the company has no estimate on when it will submit a reorganization plan to the court.

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