The trustee managing MF Global Holdings Ltd.'s assets in bankruptcy told lawmakers on Tuesday that he has no plans to pay bonuses to employees of the collapsed futures brokerage to entice them stay on board while funds for creditors are recovered.
"Bonuses are not part of my consideration now and they have not been in the past," Louis Freeh told the Senate Banking Committee.
Last month, lawmakers and MF Global customers reacted angrily to reports that Freeh planned to ask a bankruptcy judge for approval of a retention plan that would include performance-based incentives for Operating Officer Bradley Abelow, General Counsel Laurie Ferber and Chief Financial Officer Henri Steenkamp.
Ferber, Abelow and Steenkamp were kept on the payroll to help Freeh recover assets for creditors of MF Global's parent company.
On Tuesday, Freeh said bonuses have never been part of his plan.
"I want to make it very clear, it was never my intention to pay any bonuses," he said. "I never had a plan in place to pay any bonuses to senior executives."
Freeh said there are 15 MF Global employees he needs to keep on board to manage the bankruptcy smoothly and to ensure that a $22 million tax refund is secured for the estate.
These employees are "worker bees" and not "insiders" responsible for the firm's demise, Freeh said.
He told the panel he will seek "fair and competitive" salaries if he needs to negotiate with any of these employees to keep them from leaving.
"If they don't agree with that, then that's not worked out," he said.
Freeh, a former head of the Federal Bureau of Investigation, said that if these employees leave, he would be forced to hire an accounting firm, which would cost as much as three times what is being paid to the current employees.
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