Top executives from the bankrupt operator of the Indiana Toll Road will split $2.45 million in bonuses once an Australian company closes on a $5.72 billion deal to buy the lease-holding business.
ITR Concession Co. CEO Fernando Redondo and four other company executives will share the bonus money when IFM Investors completes its purchase of the company, The Times of Munster reported.
That deal is expected to close within months. ITR Concession will use the $5.72 billion to pay off its creditors.
ITR Concession's parent company, Spanish-Australian consortium Cintra-Macquarie, paid Indiana $3.8 billion in 2006 for a 75-year lease of the 157-mile highway. But ITR Concession's toll revenue didn't meet expectations because traffic fell because of the recession, according to court documents.
ITR Concession declared bankruptcy in September, reporting more than $6 billion in debt. A federal bankruptcy judge later approved a plan to accept bids for the company, which has 66 years remaining on its toll road lease.
In January, that judge approved a motion submitted by a special committee overseeing the sale which spelled out the bonus incentives the five executives might earn, depending on the amount of the winning bid. The motion did not specify how the bonus pool would be split among the executives.
The price offered by IFM Investors and accepted last week in a definitive purchase and sale agreement is $1.92 billion more than the road lease fetched nine years ago when it was auctioned off by the state of Indiana.
The deal must still be approved by Indiana Finance Authority, which oversees the lease through its Toll Road Oversight Board.
The incentive bonus plan for top executives is separate from a plan for retention bonuses for 38 toll road managers, supervisors and others also approved by the bankruptcy court. That plan will pay out up to $748,000 in retention bonuses.
Under that plan, no single employee covered will receive more than $95,000 and the average payment will be about $19,675.