The Wall Street Journal: Bankruptcy judge OKs $1.5 million in bonuses to Sports Authority execs

Sports Authority executives on Wednesday won the right to collect bonuses after a bankruptcy liquidation that erased some 14,000 jobs.

Judge Mary Walrath cleared the company to pay up to $1.5 million to three unnamed senior executives over the protests of a federal bankruptcy watchdog, who called the bonus proposal unfair.

With an estimated $400 million worth of merchandise to sell and hundreds of stores to close in a few months, Sports Authority’s bankruptcy sparked one of the largest retail liquidations, the company said.

“That does not necessarily earn them a prize,” said Hannah McCollum, lawyer for U.S. Trustee Andrew Vara, the Justice Department officer who argued against the bonuses.

Many suppliers of the defunct athletic-gear seller are getting only fractional recoveries for the goods they shipped to Sports Authority. The Englewood, Colo., company filed for bankruptcy in March and shut the doors on hundreds of stores for good at the end of July.

An expanded version of this report appears on WSJ.com.

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