Linens 'n Things granted court approval for $20 million severance plan

By Jennifer Lanning Drey

Portland, Ore., Aug. 28 - Linens Holding Co. was granted court approval to implement an up to $20 million severance plan for 546 employees at its home office and an additional 9,300 store-level employees at the company's remaining stores, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

Severance plan participants will be eligible to receive up to 26 weeks of severance pay, based on their position upon the occurrence of a qualifying event.

Qualifying events will include the employee being terminated without cause; the employee's voluntary termination within 30 days of a reduction by the company of more than 10% of the employee's annual base salary or regular hourly rate as of Aug. 1, or, if greater, the employee's annual rate or base salary at the time; or the employee's voluntary termination under the same terms by a purchaser of substantially all of the company's assets.

When requesting the approval, the company said the severance plan is designed to ease employee concerns regarding their future employment, given that store closings have already taken place.

Linens 'n Things, a Clifton, N.J., home furnishings specialty retailer, filed for bankruptcy on May 2. Its Chapter 11 case number is 08-10832.

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