Consultancy 'Won't Interfere' With New President's Job: AOPA
AOPA says it expects new President Mark Baker to be a full-time leader even though he's agreed to act as a consultant for the new owners of the California-based chain of hardware stores he led until Tuesday. Baker's consultancy was part of the deal for Lowes to buy 79 operating stores of Orchard Supply Hardware out of Chapter 11 bankruptcy for $205 million. A bankruptcy judge approved the deal on Tuesday within hours of AOPA's announcement that Baker would replace Craig Fuller as the president of AOPA. "Mark Baker and AOPA have formally agreed that his role as a consultant to Orchard Supply Hardware will be limited to occasional meetings and phone calls only if required and his advisor status to Orchard Supply Hardware will not interfere with his AOPA role," said AOPA spokesman Steve Hedges, who added that it's common practice for outgoing CEOs to act in this capacity with their former employers. In addition to getting a new job on Tuesday, Baker also pocketed more than $800,000 in bonuses for his part in steering the bankruptcy sale to a successful conclusion. AVweb asked for a podcast interview with Baker but we were told he was not yet in Frederick.
Judge Christopher Sontchi, of the U.S. Bankruptcy Court in Delaware, signed off on $2.16 million in bonuses for the top five executives at Orchard (as CEO, Baker gets 40 percent), overruling objections from attorneys from the U.S. Trustee Program that they didn't do anything to earn them. Federal attorney Tiiara Patton said Orchard already had the $205 million buyout offer from Lowes before the company declared bankruptcy. The trigger point for the bonuses was $200 million and Patton said all Baker and his executives had to do to collect was show up for work. "Are they doing anything more than what is required by their current positions? It's our position that they're not," she added. Hedges said that when Baker took over Orchard, it was already heavily in debt and when the recession hit sales declined. Bankruptcy was part of an overall strategy to bring the company back. "Orchard's management and Board determined that the best solution was the sale of the company," Hedges said. "The bankruptcy was a way to address its balance sheet issues which allowed the business to move forward with a new market position."