(Washington, D.C.) – The International Brotherhood of Teamsters is fighting Allied Holdings, Inc.’s attempt in U.S. Bankruptcy Court to pay 83 of its executives nearly $4.6 million in bonuses and $6 million in severance pay.

"We will not stand by without protest and let huge bonuses be paid to the management that led Allied into massive losses and bankruptcy," Teamsters General President Jim Hoffa said.  "This is an outrage."

"We are saddened, but not shocked, that the same management which will ask hard-working rank-and-file autohaulers for concessions will then try to pocket the money themselves," said Fred Zuckerman, Teamsters Carhaul Division Director.

An attorney for the Teamsters will appear in U.S. Bankruptcy Court for the Northern District of Georgia on Tuesday to challenge the company’s bonus and severance plan.

On September 27, Allied Holdings and its co-debtors filed a so-called Key Employee Retention Plan or "KERP bonus" motion with the Bankruptcy Court. Allied management claims that the bonuses are necessary to keep executives from leaving the bankrupt employer when it needs their services for a reorganization. The motion however does not disclose how many, if any, Allied executives have voluntarily left employment. The Teamsters Union believes that the number of Allied executives who have voluntarily left employment with the company this year is not excessive.

The bonus program is heavily weighted toward Allied top management, whose chief executives and senior vice presidents will receive bonuses from 60 percent to 96 percent of base salary, in some cases hundreds of thousands of dollars for each executive. These amounts do not count severance pay, which in some cases is as high as 150 percent of full salary.

The debtors have not yet formally sought concessions from their rank-and-file unionized workers, but they are expected to do so in the near future.

The debtors filed for Chapter 11 protection on July 31, 2005. They did not file their statements of financial affairs (which list their assets and liabilities) until the KERP motion was filed, nor have they as yet proposed a "business plan" for how to reorganize the company and return it to profitability. There has been seemingly little activity, other than the design of a massive bonus program for executives, in the more-than-two-month period since the bankruptcy was filed.

The bonus program must be approved by the bankruptcy court before it is effective. No other opposition is expected from the committee of unsecured creditors or the large secured lenders financing Allied.

Congress outlawed this type of bonus program except in highly unusual circumstances in the new bankruptcy law, effective in October. Allied filed its bankruptcy under the old law, before the new prohibitions on massive, undeserved bonuses take effect.

Allied management's base salaries compare favorably with other companies in the transportation industry even before bonuses.

Founded in 1903, the International Brotherhood of Teamsters represents more than 1.4 million hardworking men and women throughout the United States and Canada.