Hycroft Mining Holding Corp (HYMC)

[Stockminder]

Docket #768
OBJECTION OF THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS
TO DEBTORS’ MOTION FOR AN ORDER (I) AUTHORIZING AND APPROVING (A)
KEY EMPLOYEE INCENTIVE PLAN (B) NON-INSIDER KEY EMPLOYEE
RETENTION PLAN AND (C) SEVERANCE PLAN

PRELIMINARY STATEMENT
On the same day that they suspended their mining operations, Debtors formally requested the approval of another round of bonuses and a multi-million dollar severance package
outside of the ordinary course of their business. This request is anything but pro forma when it coincides with such suspension and, most recently, the filing of a proposed amended plan of
reorganization (the “Amended Plan”) that limits creditor recoveries to stock and provides for post-effective date incentive and retention plans for management and key employees, with undisclosed terms and beneficiaries, and an October confirmation date. In their Motion, Debtors seek the approval of: (i) a Key Employee Incentive Program (the “KEIP”) to pay bonuses to four executive insiders of Debtors (the “KEIP Employees” or
“Insiders”), and (ii) a Key Employee Retention Program (the “KERP”) to pay a second round of bonuses to 51 non-insider employees of the Debtors, each upon the effective date of a plan of reorganization, and (iii) a new multi-million dollar severance package for all employees -- the four Insiders and 138 individuals – who are terminated without cause prior to the effective date of a plan of reorganization (the “Severance Plan”).
The Motion seeks relief not permitted by Sections 503(c) and 363(b) of the Bankruptcy Code and should not be approved at this juncture. Debtors have failed to demonstrate that the
KEIP is truly intended to award Insiders for performance at a time of reduced responsibilities and does not comply with the statutory requirements of Section 503(c)(1). As for the second
non-insider KERP and the Severance Plan, while the Equity Committee recognizes the value of Debtors’ employees, Debtors must supplement the record to make a proper showing of sufficient
facts and circumstances to justify the bonuses and the Severance Plan.