Bankrupt Prison Health Firm’s Creditors Oppose Executive Bonuses

Junior creditors of troubled prison health-care provider Wellpath Holdings Inc. objected to a proposal to pay up to nearly $4.6 million in incentive bonuses to 12 executives if they meet certain performance metrics.

The plan is a “proverbial ‘lay up’” measuring goals senior management has already met, a committee of unsecured claimholders said in a Feb. 7 objection in the US Bankruptcy Court for the Southern District of Texas. The committee called it a “disguised retention plan” rather than an incentive plan.

If approved, Wellpath’s senior management would receive bonuses while its junior creditors are potentially in line for little ...