Nevada Copper Corp NEVDQ

RE:Motion Epric - 7-22-2024 emplyee retention - extensions

[mckayk3]

Summary:

1. Background:

• On June 10, 2024, Nevada Copper, Inc. and related entities filed for Chapter 11 bankruptcy.
• The U.S. Trustee appointed an Official Committee of Unsecured Creditors for two of the six cases.
• Debtors are involved in mining copper and other minerals, with significant operations at the Pumpkin Hollow project in Nevada.
• The Debtors are pursuing a sale of substantially all assets and have suspended mining operations to conserve liquidity.

2. KERP Motion (Key Employee Retention Plan):

• Seeks approval of a retention plan for 71 employees, with bonuses ranging from $25/hour to $35/hour for hourly employees, and 25% to 35% of annual salaries for salaried employees.
• Debtors claim these employees are vital for the bankruptcy proceedings.
• The U.S. Trustee argues that the KERP might violate Section 503(c)(1) of the Bankruptcy Code, which restricts retention bonuses for insiders unless specific criteria are met.

3. KEIP Motion (Key Employee Incentive Plan):

• Seeks approval of a performance-based incentive plan for eight employees, totaling up to $3.42 million based on transaction value and a fixed amount of $855,000 upon closing a sale.
• Debtors argue the KEIP is performance-based, not retention-based.
• The U.S. Trustee argues that the KEIP might be a retention plan in disguise and questions whether it meets the requirements of Section 503(c)(1) or, if not, Section 503(c)(3), which governs non-insider incentive plans.

4. Legal Analysis and Arguments:

• Section 503(c)(1): Governs retention bonuses for insiders and requires meeting specific criteria.
• Section 503(c)(3): Applies to non-insider incentive plans and requires plans to be justified by the facts and circumstances of the case.
• The U.S. Trustee contends that the Debtors have not provided sufficient information to determine if the KERP and KEIP are compliant with the relevant legal standards.

5. Conclusion:

• The U.S. Trustee requests that the Court deny the KERP and KEIP motions and grant any other relief deemed appropriate.

The document highlights concerns about compliance with legal standards for employee compensation during bankruptcy and seeks a judicial review of the proposed plans.