Borders wants to pay as much as $8.3 million in bonuses to executives and board members to keep them from leaving as it reorganizes under bankruptcy court protection.
The bookstore chain said in court documents filed Thursday that, since it filed for Chapter 11 bankruptcy protection in February, about 25 executives have left, a rate of about five per week.
To halt the exodus, Borders wants to give bonuses to 17 executives whom it deems necessary for its reorganization. It said it "cannot afford any further attrition."
"In many cases, (Borders) may not be able to find suitable candidates in the aggressive time frame (Borders) has set for emergence through a plan or a going concern sale," the company said in the filing.
The company wants to give its CEO, financier Bennett LeBow, as much as $1.7 million. In addition, it wants to give $1.1 million to executive vice presidents, $371,000 to the vice president for human resources, $2.4 million in other bonuses and $1.2 million in payments to 25 of its directors and a few other executives.
The court will hear testimony on the request April 14.
Borders, based in Ann Arbor, Mich., is the nation's second-largest traditional book seller after the much larger Barnes & Noble Inc. chain. It
Borders hopes to present a formal reorganization plan to its creditors by early April and to exit bankruptcy as a smaller and profitable company in August or September. It planned to close about 200 of its stores by the end of April.
Traditional book sellers face increasing competition from online sites and discounters.
Shares of Barnes & Noble fell 3 cents in regular trading Friday and another 4 cents after hours to $9.21.