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Judge OKs More Pay Cuts for Edwards Theatres Family

November 21, 2000|LESLIE EARNEST | TIMES STAFF WRITER

The family that runs troubled Edwards Theatres Circuit Inc. will take another round of pay cuts and chop some relatives off the chain's payroll under an agreement approved Monday in Bankruptcy Court.

Chief Executive James Edwards III, who took a pay cut of almost $1 million three months before the struggling cinema chain filed for bankruptcy protection in August, will see his pay drop $85,000 more to $490,000 on Feb. 23.

Edwards' sister, Chief Corporate Officer Joan Edwards Randolph, who took a 63% salary reduction in May, will be dropped from the payroll altogether in February.

Edwards' wife, Patricia, director of marketing and community relations who makes $125,000, also will relinquish her salary in February. Another sister, Carole Ruoff, left her position as company treasurer just before the bankruptcy filing.

Bernice Edwards, co-chair of the board and widow of late founder James Edwards Sr., will retain a salary of $7,800, according to court documents. She drew a salary of $567,200 before a cut in May.

The latest round of cuts was approved by bankruptcy Judge Lynne Riddle, despite objections from the company's largest creditor, which claimed the chain's top executives still were being paid too much.

The creditor, Bank of America, had particularly objected to the salaries of James Edwards, the chief executive, and Stephen Coffey, who was named president just before the bankruptcy filing. The bank had also urged that part of the executives' pay be tied to the company's performance.

But Riddle ruled that Coffey can retain his $520,000, Edwards' attorney Eric Goldberg said.

The company has maintained that the proposed salaries are reasonable and has said Coffey's salary should be considered apart from other executives because his position with the company is temporary.

Despite the cuts, the company's attorney declared victory after Monday's hearing. "The court found that the company had made significant sacrifices already," Goldberg said.

Although the bank's attorney declined to comment, an attorney for another group of creditors said he was satisfied with the court's ruling.

"The committee believes the arrangement accomplishes significant cost savings without disruption to Edwards' operations," said attorney Jeffrey Reisner.

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