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Liberty House to curtail
By Peter Wagner
execs’ raises in 2000
Star-BulletinJMB Realty Corp., which is battling for control of Liberty House, has backed away from its earlier objections to salary increases for top executives at the Hawaii retailer, asking only that no more executive raises be given this year.
The settlement, between Chicago-based JMB and Liberty House, was disclosed at a hearing in U.S. Bankruptcy Court today in Honolulu.
Liberty House last year gave two raises to 11 executives, citing heavy turnover in its ranks since the company filed for Chapter 11 bankruptcy on March 19, 1998. The raises totaled more than 30 percent for some executives.
Liberty House said the increases were needed to stem turnover and be competitive.
The retailer, which operates under bankruptcy court protection, is the subject of a battle between parent company JMB and a Bank of America-led lenders group. The lenders group did not oppose the raises.
The retailer said in recent court filings it began raising pay and restoring benefits for all its 3,000 employees last year.
Among benefits cited was a 401k retirement program, discontinued along with some vacation and medical benefits after the bankruptcy. But some Liberty House employees say they have seen no raises since the bankruptcy and note that the 401k contributions won't start until next year, contingent on the company's performance.
Meanwhile, a March 16 hearing was set to learn the status of a $138 million Internal Revenue Service claim against Liberty House. IRS attorney Carol Muranaka said during today's hearing that the claim will likely be "substantially reduced."
