More than 30 employees of bankrupt cryptocurrency exchange Voyager will receive $1.6 million in bonuses as the company works to return customer funds frozen on its platform.
Bankruptcy court judges in Southern New York approved Voyager’s request to reward key personnel this week. Voyager argued that it needed to reward the best workers in order to keep them as the company restructures its financial assets. Under the Key Employee Retention Plan (KERP), 34 out of 328 employees will receive an additional 22.5% of their annual salary, or $1.6 million.
These employees provide services considered essential for the business, such as accounting, IT infrastructure, legal, etc. “[Voyager] employees have legitimate reasons to be concerned about their long-term employment status given the ongoing sale process and the uncertainty of future transactions,” lawyers for the company said in documents filed with the court. court. [PDF].
“And key employees are needed whether there is a standalone sale or reorganization. To confirm a standalone plan, [Voyager] will obviously need these employees to operate [its] moving forward… Ultimately, retaining key employees is critical to completing any transaction that delivers value to customers. »
Voyager had asked judges to approve a total of $1.9 million in bonuses for 38 employees, and this type of request is standard for companies that have gone bankrupt and need some kind of workforce. to clean up the mess. That said, the Official Committee of Unsecured Creditors appointed to represent the debtors opposed it. The committee criticized Voyager for attempting to reward staff when consumers had not yet been compensated for their losses, and said it had provided no evidence that employees would quit without the extra pay.
“At a time when thousands of creditors are struggling to pay basic personal expenses due to debtors’ flawed business model, [Voyager] are now seeking to pay bonuses to their already well-paid employees… It is difficult to understand why KERP’ is necessary and appropriate to avoid costly disruptions to the [Voyager’s] and allow debtors to resume business after the emergency,’ as the debtors claim,’ he said in court papers. [PDF].
The committee went so far as to say that employees are unlikely to quit given that the job market in the cryptocurrency industry “is relatively barren” given recent layoffs from companies like Coinbase. Voyager and creditors, however, reached a deal on bonuses when the cryptocurrency exchange promised to reduce total bonus payouts to $1.6 million and cut other costs to save $4 $.6 million elsewhere.
Voyager returned about $219 million or 80% of the funds to customers who stored their cash funds in the area, a lawyer for the company said, according at Bloomberg. But those who stored cryptocurrencies in their accounts have not yet been compensated.
The company said consumers could start filing claims for their crypto coins now. Earlier this month, judges allowed the company to begin returning $270 million to customers. ®