Judge OKs settlements with top brass at LMC
LORDSTOWN — A U.S. bankruptcy court judge has authorized Lordstown Motors Corp. to settle contractual obligations with members of its core management team, allowing them to stay in place through the company’s exit of Chapter 11 and beyond.
The settlements, according to a court filing, incentivize the six executives “who are effectively working themselves out of their jobs” to perform the “hard work” needed to resolve the cases, ensure their support and cooperation after the effective date of the reorganization plan and avoid any contract disputes over payments.
“The settlement preserves the debtors management through the effectiveness of the plan and provides the required support to execute the plan after effectiveness,” the filing states.
Lordstown Motors wants confirmation of its reorganization plan by the end of 2023. A confirmation hearing is scheduled for Dec. 19.
The executives are Edward Hightower, CEO and president; Dan Ninivaggi, executive chairman; Melissa Leonard, executive vice president, general counsel and secretary; Adam Kroll, executive vice president and chief financial officer; Michael Port, vice president, finance and controller; and Jill Coniglio-Kirk, vice president, people and culture.
According to the request Lordstown Motors filed Nov. 13, the entire settlement amount of $3.05 million is $512,233 less than what the company would have owed the employees in severance. The filing states:
● Hightower’s settlement amount is $975,267. It is $242,233 less than what he would be owed in severance, excluding any restricted stock units, which are stock shares given as a form of compensation.
● Ninivaggi’s and Leonard’s settlement amounts are each $550,000. That is $135,000 less than what they would be owed in severance, excluding restricted stock units.
● The settlement for Kroll is $685,000; the settlement for Port is $167,500; and the settlement for Coniglio-Kirk is $130,000. Each amount is equal to what they would have been given in severance, excluding restricted stock units.
In addition, Hightower, Ninivaggi, Leonard and Coniglio-Kirk agreed to perform consulting work for six months for the company after the reorganization plan is effective
Further, the settlement calls for Kroll to oversee preparation of the company’s comprehensive financial report for 2023 and perform other consulting services at $450 per hour; and for Port to perform similar work for $300 per hour.
Without the key executives, the filing states it would be “far more difficult, time consuming and expensive” for Lordstown Motors to, in part, meet bankruptcy and regulatory reporting requirements, file tax returns and reconcile the claims against the company.
When Lordstown Motors filed the request Nov. 13, the company, according to the filing, had fewer than 20 employees. That number was expected to drop as the company anticipated more to leave by today, the filing states.