Julie Brown, founder and chief executive officer of troubled supplier Plastech Engineered Products Inc., will collect $9.25 million over five years from the company's term lenders.
U.S. Bankruptcy Court Judge Phillip Shefferly, who is overseeing Plastech's Chapter 11 case, approved settlements for Brown and several other claims in a daylong hearing June 26. The company is in the process of selling off its three main business units.
Plastech's term lenders will pay Brown the $9.25 million in five annual installments of $1.85 million. The first installment will be paid after the Dearborn, Mich.-based injection molder closes on the sale of its interiors business to JCIM LLC, a unit of supplier Johnson Controls Inc.
Court documents outlining the $9.25 million settlement also revealed that nine members of Brown's family were employed by Plastech.
The first Brown family member hired was a brother, in October 1988, who is a facilities manager. Since then, Plastech has hired two more of Brown's brothers, a sister, a cousin, two sisters-in-law, a nephew, and her husband, Jim Brown, who was hired in November 1999 and is chief operating officer.
One of the sisters-in-law was hired in September 1993 as the company controller.
All but one of the nine family members are active Plastech employees.
Also on June 26, Shefferly approved a $1 million incentive program for Plastech's management team. Brown was not included in that program.
Glendale, Wis.-based Johnson Controls and the buyer of Plastech's exteriors business unit, Decoma International of America Inc., will fund the program. Decoma is the exteriors business unit of Canadian supplier Magna International Inc. of Aurora, Ontario.
The $1 million program was approved despite a Plastech associate's concession in court testimony that poor management may have been a contributing factor in the company going into bankruptcy.
Steven Wybo, who was hired by Plastech to develop a management incentive plan in December 2007, said that past practices may have been a contributing factor to the company's financial troubles.
Under the incentive program, managers at Plastech's roughly 40 plants would receive a bonus of $5,000 to $10,000 for their efforts in completing a sale of the company's various business segments.
The bonuses increase incrementally within tiers of the company's management at the corporate level. As much as half of the $1 million in bonuses will be divided among the top tier, which is comprised of four senior executives that do not include Brown. Those four also will have the ability to reallocate the bonuses for lower management.
Ryan Beene, a staff reporter for Crain's Detroit Business, contributed to this report.