Chemtura Corp (fka CHMT)

[novachem]

Chemtura Corp. (CEMJQ) will be in bankruptcy court in New York Tuesday seeking approval to pay up to $44 million in bonuses to managers. The United Steelworkers is protesting company's decision to hand out bonuses to some 310 eligible managers amid the company's moves to cut health-care and retirement benefits.

The union was particularly incensed that up to $19.3 million of the bonuses could be directed to Chemtura's chief executive and eight other company "insiders." Chemtura says the bonuses are necessary to ensure that its managers receive compensation on par with other companies in the chemical industry.

Bankruptcy-law changes that took effect in October 2005 were meant to curtail a company's ability to pay bonuses to senior executives while shortchanging rank-and-file workers.

The changes were in response to perceived abuses of the bankruptcy system by executives of giant companies who, in the words of the late U.S. Sen. Edward Kennedy (D., Mass.) "lined their own pockets but, but left thousands of employees and retirees out in the cold."

In recent year years, however, bankruptcy judges have typically deferred to arguments that bonus plans fall outside the scope of the revised law.