OTB Holdings LLC and its affiliated debtors have filed a comprehensive motion seeking bankruptcy court approval to implement a $305,000 Key Employee Retention Plan (KERP) designed to maintain operational stability during their ongoing Chapter 11 restructuring and sale process.
The motion, filed on March 11, 2025, in the United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division (Case No. 25-52415), outlines a detailed retention strategy targeting 22 non-insider employees deemed critical to preserving the restaurant chain's going-concern value.
Retention Strategy and Financial Structure
The proposed KERP represents a strategically calibrated approach to employee retention during a period of significant organizational uncertainty:
- Payment Structure: Retention payments ranging from 3% to 20% of participants' annual salaries
- Total Program Cost: Approximately $305,000, averaging $13,864 per participant
- Payment Timing: Disbursements would occur at the earlier of (i) 90 days following the March 4, 2025 petition date or (ii) immediately prior to the consummation of a sale of substantially all of the debtors' assets
- Forfeiture Provision: Participants terminated for cause would forfeit any unpaid retention payments
According to court documents, the highest individual payment would reach $45,000 for a vice president position (20% of salary), while the lowest would be $4,000 for an analyst position (7% of salary).
Business Justification and Legal Framework
In their 26-page filing, the debtors present multiple business justifications for the retention plan:
"The KERP Participants—along with their skills, knowledge, and hard work—are critical to ensuring that the Debtors continue to maximize stakeholder value in a challenging economic environment," the company stated. The filing emphasizes that replacing these employees would require "significant efforts, and incur additional financial and other costs" to identify, recruit, and train replacements.
The debtors argue the plan meets legal requirements under Bankruptcy Code Sections 363(b) and 503(c)(3), asserting that Section 503(c)(1)'s restrictions on insider retention plans are inapplicable as none of the KERP participants qualify as "insiders" under Section 101(31) of the Bankruptcy Code.
The motion includes extensive legal analysis distinguishing between job titles and actual control, noting: "While certain of the KERP Participants have the title 'vice president' or 'senior director,' these titles do not confer executive authority."
Bankruptcy Context and Representation
OTB Holding LLC and its affiliated entities filed for Chapter 11 protection on March 4, 2025. The restaurant company is represented by King & Spalding LLP, with attorneys Jeffrey R. Dutson, Brooke L. Bean, and Alice Kyung Won Song serving as proposed counsel for the debtors in possession.
Market Context and Comparable KERP Programs
The filing references the debtors' analysis of comparable retention plans approved by bankruptcy courts since the 2005 enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act. This analysis included six similarly situated companies with retention plans covering between five and forty-eight participants, providing context for the reasonableness of the proposed plan's design and payout structure.
The court has scheduled a hearing on the motion, with the debtors requesting waiver of the 14-day stay period under Bankruptcy Rule 6004(h) to expedite implementation if approved.
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Debtors' Motion for Entry of an Order Approving Key Employee Retention Plan (26 pages)