Mosaic Sustainable Finance Corporation, a solar loan servicing company, has asked a Texas bankruptcy court to approve a $1.65 million retention plan for key non-executive employees as it navigates Chapter 11 proceedings. The company, which filed for bankruptcy protection on June 6, is seeking to retain critical staff while pursuing parallel restructuring and sale processes.
In a motion filed on June 11 with the U.S. Bankruptcy Court for the Southern District of Texas, Mosaic proposed retention payments for 63 employees deemed essential to its ongoing operations. The payments would range from 5% to 25% of each employee's base salary, with an average of approximately 17.1%.
"For the Debtors to maintain ordinary-course operations during these Chapter 11 Cases, it is essential that the Debtors retain a core group of non-insider Employees who are key to the Debtors' realization of these goals," the company stated in its motion.
The retention plan comes as Mosaic acknowledges it has "experienced increased attrition during the period immediately preceding" its bankruptcy filing. The company argues that the plan is critical given the "greater demands placed upon the KERP Participants during the Debtors' Chapter 11 Cases."
According to court documents, the Key Employee Retention Plan (KERP) would pay eligible staff in two installments: 50% upon court approval and the remaining 50% upon the earlier of the effective date of a Chapter 11 plan, the consummation of an asset sale, or six months following the petition date.
The company emphasized that none of the 63 employees included in the plan are insiders as defined by the Bankruptcy Code. The filing specifically notes that the KERP participants do not include any employee who is appointed by the board of directors, reports directly to the board, regularly attends board meetings, or exercises managerial control over the company's operations as a whole.
Mosaic entered bankruptcy with support from key stakeholders to pursue a reorganization plan pursuant to terms agreed with certain of its prepetition lenders. The proposed reorganization contemplates a debt-for-equity transaction focused on the company's loan servicing business. Simultaneously, the company is continuing what it describes as a "robust marketing process" to solicit potential bids for all or portions of its assets.
As of the petition date, Mosaic employed approximately 153 people across its business operations. The company provides services related to solar loan portfolios, including both loan origination and servicing businesses.
In support of its motion, Mosaic analyzed eight comparable non-insider retention plans approved in recent Chapter 11 cases involving debtors of similar size and complexity. The company notes that while its proposed $1.65 million plan is in line with the median total cost of these peer plans (approximately $1.8 million), the median cost per participant in Mosaic's plan (approximately $23,000) is significantly below the peer group's median of $54,000 per participant.
Mark A. Renzi, the company's Chief Restructuring Officer from Berkeley Research Group, LLC, submitted a declaration supporting the motion.
The case, numbered 25-90156, is being heard by Judge Lopez. A hearing on the retention plan motion is scheduled for July 2, 2025. Paul Hastings LLP is serving as proposed counsel to the debtors.
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