West Marine disclosed in a mandatory Chapter 11 hearing yesterday that its former chief executive received a $1.2 million bonus, while current CEO Paulee Day was paid a retention bonus on May 1, just 16 days before the company filed for bankruptcy.
The timing immediately sharpened the stakes for creditors still waiting to be paid. David Kelton said West Marine owes his company, American Blue Claw LLC, $12,000 after a $100,000 order he said he received on April 7, and he asked whether any of the bonus money could be clawed back. Kelton’s complaint landed in a hearing where the company is trying to steer itself through Chapter 11 and emerge in August, with another court date set for June 11 at 2 p.m. to consider first-day motions.
Bankruptcy trustee Linda J. Casey pressed the issue by asking what justified the former chief executive officer’s $1.2 million payout. Former CEO Chuck Rubin left West Marine in late 2025, and the payment to Day became the sharper flash point because it was made before the filing. West Marine interim vice president Amir Agam said the board approved Day’s retention bonus to keep her in place through “the critical part of this restructuring,” while attorney and corporate restructuring associate Shella Borovinskaya said such bonuses were meant to keep key talent on through whatever transaction materialized.
That explanation did little to ease the frustration of smaller vendors, especially with a court document listing 30 top suppliers owed between $697,082 and $8.5 million. Kelton said his company is one of hundreds of suppliers on the hook for goods shipped but not yet paid for, a reminder that the restructuring is not just a balance-sheet exercise but a cash problem spreading through the supply chain. The unresolved question is whether the bonus money can be recovered at all, or whether the payments will remain one more cost of a filing that came after the checks went out.
For West Marine, the immediate test comes on June 11, when the court is scheduled to hear first-day motions. For suppliers like Kelton, the more urgent issue is whether the company’s promise to emerge in August will arrive before more unpaid bills do.
