I have read the Fung and Skatoff affidavits as well as the Proposed Order but see no mention of the Management Incentive Plan. Stroot or others, could you please refer me to the paragraph or page of the Fung affidavit or elsewhere where this plan is discussed. By the way, I do see in the draft Order to be signed by the judge reference to a Directors' Charge not to exceed 10 mil in the list of priorities and it is 3d in priority just after the Administrative charge and the DIP financing charge, but I see no other reference to the amount payable to management under an incentive plan. If the Directors' Charge does not refer to the Management Incentive Plan, does anyone know what it refers to?
Assuming the % given to management is what has been discussed, 10% up to 700 mil and 2% thereafter, I do consider it grossly excessive. Since the incentive can only relate to work that remains to be done before there is an arbitration award, and not work previously done, I note that the initial Memorial that had to be submitted to the ICSID panel has already been submittted. That memorial is in essence the substance of KRY's case against Vz consisting I assume primarily of Affidavits of Fung and others as to the facts, backed up by numerous Exhibits, an Affidavit from the company that did the valuation as to lost profits, and the like. Vz now will submit its case by 8/12/12 and the only thing remaining to be done by KRY or its management is to submit a Rejoinder, or response, to Vz's case, which will consist of additional affidavits and exhibits that rebut or counter any facts in Vz's case that are inconsistent with the facts in KRY's submission. Yes, they must do a few other things, but this is the essence ot it. So we are giving management a minimum of 60 mil for cooperating with their attorneys in preparing the Rejoinder to Vz.s submission? But since KRY's attorneys are intimately aware of the facts in all their slighest details and can almost certainly prepare the additional affidavits and other aspects of the Rejoinder w/o any help from Fung or others, what management is getting the 60 mil for is merely to have Fung and possibly other employees sign these additional affidavits. Since all of the detailed Fung affidavits and exhibits to these affidavits already filed were prepared by the attorneys and not by Fung after having obtained the facts from him and others, the 60 mil for a few signatures and nothing else seems improper. Am I to believe that Fung or other employess would not sign additional affidavits prepared by the attorneys unless they received at least 60 mil? In other words, management will require at least 60 mil to do what is their job? If so, then they would be violating their fiduciary obligation to the shareholders. Sounds grossly improprer to me.
Under the proposed order that KRY's attorneys have prepared, the noteholders come in fifth of the six listed charges. If the noteholders now come up with 35 mil needed for the DIP financing and require only 30 versus 35% of the arb. award and offering mamagement no incentive plan, would Skatoff not be virtually forced to recommend them as the new winning bidder?
