Judge Approves FPA’s Bankruptcy Bonuses

FPA Medical Management Inc. won a judge’s approval for a $3.5-million bonus plan to keep executives of the struggling operator of physician practices with the company during its bankruptcy reorganization. Bankruptcy Judge Peter Walsh said the plan, which permits FPA’s 50 top executives to receive bonuses of as much as 125% of their salaries, is necessary to give the company a fighting chance to right itself. San Diego-based FPA filed for Chapter 11 bankruptcy protection in July after a cash crunch left it unable to pay doctors, employees and the interest on some of its bonds. To cut the company’s stay in Bankruptcy Court, FPA has filed a prepackaged reorganization plan that has major creditors’ support. To make the plan work, though, Walsh agreed with FPA’s lawyers that the company must hang on to its experienced executives.