HomeBanc seeks court approval to implement worker retention plan

By Reshmi Basu

New York, Sept. 4 - HomeBanc Corp. asked for court approval to implement a retention plan for non-insider employees, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Due to the credit crunch in real estate financing, the company has reduced its workforce to 184 employees from 1,000 workers. In addition, the head count is expected to dwindle as the company winds down its operations, which means that the remaining employees have been asked to handle additional work associated with the Chapter 11 cases, HomeBanc said in the motion.

Under the filing, the company contended that it needs to keep those workers as it seeks to sell its loan servicing rights and other assets of the loan servicing business because "if these employees were to leave...prematurely, the debtors would be vulnerable to immediate and severe adverse repercussions, thus jeopardizing the value of the loan servicing business."

HomeBanc said the proposed plan covers 87 workers, who are involved mainly in servicing the company's portfolio, which currently exceeds $8 billion in funded loans.

The retention plan will cost HomeBanc no more than $1.3 million while the average annual compensation will run around $60,768. The plan is expected to end on Nov. 1.

"Without being able to provide incentives to rank and file employees, the debtors will almost certainly find that their most talented, experienced and motivated employees will find it necessary to consider employment options elsewhere," the company observed in the motion.

A hearing is scheduled for Sept. 20.

HomeBanc, an Atlanta-based mortgage banking business, filed for bankruptcy on Aug. 9. Its Chapter 11 case number is 07-11079.

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