Advanced Glassfiber: court approves employee plan

Advanced Glassfiber Yarns LLC has received approval from the bankruptcy court handling its Chapter 11 case for an employee retention plan to keep its key managers on the job.
The 28 May 2003 order fr…

Advanced Glassfiber Yarns LLC has received approval from the bankruptcy court handling its Chapter 11 case for an employee retention plan to keep its key managers on the job. The 28 May 2003 order from the U.S. Bankruptcy Court in Wilmington, Delaware, authorizes the company to spend USD 2.5 million on a retention plan for 42 senior and midlevel managers. Court papers said the company“s bankruptcy has caused concern among its employees and the retention program is needed as an incentive for employees to stay until the conclusion of the case. The company said the retention plan is needed to reverse a trend of less favorable financial rewards that has been seen over the past two years. Salaried employees haven“t received increases for more than a year and no rises are expected in the company“s 2003 operating plan, court papers said. Prior to the bankruptcy filing, the company also stopped making pension plan contributions and increased health insurance contributions from employees. The company further amended its severance plan, reducing the maximum benefit payable from 12 months salary to three months salary – with the exception of employees at the level of vice president and above. Court papers also said the company would suffer significant costs associated with losing its key executives. Advanced Glassfiber would have to begin a search to fill the vacant positions, train new employees, and pay premium benefits to attract new employees to a Chapter 11 company. Under the company“s retention plan, employees who remain with the company would receive retention bonuses on 31 December 2003, 30 June 2004, and 31 December 2004. Court papers said that about USD 420,000 would be paid to top performing key employees as performance-based bonus payments and would be distributed at the discretion of the chief executive. Advanced Glassfiber makes and supplies glass yarns to customers in Latin America, Asia, Canada, Europe and the U.S. The company said its Chapter 11 petition was brought on by a significant global economic downturn and inventory correction in the electronics market. Advanced Glassfiber listed assets of USD 194.1 million and debts of USD 409 million as of 31 October 2002, when it filed for Chapter 11. When the company filed for bankruptcy, it employed 1,205 people. Since then, it has laid off 350 workers at three manufacturing plants in Aiken, South Carolina, South Hill, Virginia, and Huntingdon, Pennsylvania, court papers said.