Voyager wants $1.9 million to pay bonuses to 38 employees the company calls “necessary” to continue operating.
Creditors of crypto-lending Voyager Digital do not believe the company needs to pay employees a “retention bonus,” according to a new regulatory filing shared late Friday.
Voyager, currently undergoing bankruptcy proceedings in the United States Bankruptcy Court for the Southern District of New York, asked a federal judge to approve $1.9 million of its funds for its “Human Retention Plan.” Chief Executive Officer” (KERP), that is, bonuses for 38 employees. The company claims to be important for continued operations and restructuring. On Friday, the Official Committee on Unsecured Creditors – a group of Voyager customers – protested, saying Voyager employees “have been duly compensated,” and argued that the company has done so. very little to reduce costs.
“The Debtor has not provided any evidence to justify the retention awards beyond a concluding statement that these employees are necessary. On the date of the lawsuit, only 12 of Con’s approximately 350 employees were present debtor has voluntarily resigned,” the filing said.
Employees perform “essential accounting, cash and digital asset management, IT infrastructure, legal, and other critical functions for Debtors,” Voyager’s Aug. 2 filing said.
“KERP allows the Debtor to retain certain key non-internal employees and is consistent with retention programs in similar cases of chapter 11. KERP provides the payment of cash retention rewards to 38 non-internal employees of the Debtor,” the filing said.
Typically, employees have a “large share of equity” in their total compensation, but the value of this equity “diminished,” meaning the employee is currently underpaid. than market value. Furthermore, Voyager’s current restructuring proposal would cancel the equity interest, the company said at the time. Losing these employees would hurt the company’s restructuring efforts, among other issues.
These employees are described as “non-insiders,” meaning non-executive employees.
Creditors argue that even if these employees leave for greener pastures, mass layoffs across the industry mean they should be easy to replace.
As a further issue, Voyager CEO Steven Ehrlich asked the court to allow his company to compile the names, titles, salaries, supervisor names and bonus proposals for 38 employees. member, stating that this is “non-public, personal and/or sensitive information.”
The US Trusteeship Office, which earlier this week filed to appoint an independent verifier to investigate the finances of the Celsius Network (another crypto lender facing bankruptcy proceedings). property), also filed objections to Ehrlich’s request on Friday.
“Debtors seek an order under Bankruptcy Code, section 107(b) that permits the sealing or reprocessing of virtually all information regarding names, job titles, supervisory information, level of proposed salary and bonus amount of each of the 38 KERP Participants,” the Trustee’s filing said. “This is important information that creditors and other interested parties will need to evaluate Bonus Movement.”
Voyager has stated that the employees are not insiders, but other parties with an interest in the proceedings may argue otherwise and should be given the opportunity to do so, the Commissioner’s office said. .
In the footnote, the Trustee’s profile goes further saying that “based on the US Trustee’s assessment of the unanswered information, one or more KERP Participants may also classified as an insider.”
The bankruptcy court will hold a hearing on August 24, 2022 to contest the proposal.
Comments (No)