M. Fabrikant requests court approval of modified severance plan

By Jennifer Lanning Drey

Portland, Ore., Nov. 30 - M. Fabrikant & Sons Inc. requested court approval to institute a modified severance plan that would apply to employees working for the company as of, or after, its Chapter 11 filing, according to a motion filed with the U.S. Bankruptcy Court for the Southern District of New York on Thursday.

The company estimates that the maximum that would be paid to employees under the modified plan is $635,000, which is $50,000 less than under its current severance plan, according to the motion.

Under the modified severance plan, employees would be entitled to receive a severance payment equal to two weeks of their current salary, regardless of their prior accrual of severance benefits or their length of past employment.

The modified plan also provides for a supplemental severance and incentive payment to certain employees deemed to be integral to M. Fabrikant's restructuring efforts, according to the motion.

M. Fabrikant said in the motion that the modified severance plan is critical to its reorganization process because it provides an incentive for key employees to remain with the company.

A hearing has been scheduled for Dec. 14.

M. Fabrikant, a New York-based manufacturer and distributor of diamonds and gemstone jewelry, filed for Chapter 11 on Nov. 17. Its 11 case number is 06-12737.

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