The U.S. Bankruptcy Court Trustee has agreed to withdraw its objections to Frontier Airlines’ plan to offer severance packages to senior managers.
The issue had been set for a hearing today in federal bankruptcy court in New York, but it was called off after the trustee agreed not to contest it, said Frontier spokesman Steve Snyder.
The plan would apply to 65 employees at the director’s level or higher. Benefits upon termination would range from $50,000 up to $144,180.
The package is expected to cost less than $1.5 million but could balloon to more than $4 million under a worst-case scenario in which all or most of the managers would be dismissed as Frontier attempts to financially reorganize.
Frontier said it needs the severance package to prevent key executives from leaving during the reorganization.
The trustee’s office had filed an objection, saying the plan violated bankruptcy regulations because it is not applicable to all employees and because Frontier has not proved that the amount of severance pay conforms to regulations.
“We gave (the trustee’s office) a more in-depth explanation and reiterated that it’s a fair and reasonable amount,” Snyder said. “They were satisfied with the representation.”
The plan must still be approved by the bankruptcy-court judge.
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
