A New York bankruptcy court has given the green light to cryptocurrency broker Voyager Digital to pay retention bonuses to key staff members.
The company filed a petition in the United States Bankruptcy Court on August 2 seeking approval of its Key Employee Retention Plan (KERP), which involved payments worth $1.9 million to 38 key employees who have been identified as crucial to the continued operation of the exchange.
Creditors of the company, which filed for bankruptcy in July 2022, initially objected to Voyager’s KERP payments in a court filing on August 19, saying payments to investors should take priority over employees. “well paid”.
According to court documents, an agreement was achieved between Voyager and the creditors’ committee to drop opposition to the proposed KERP under certain conditions. Chief among these is the implementation of operational cost reduction measures to save $4.6 million. KERP payments represent 22.5% of eligible employees’ annual salaries.
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Voyager argues that the 38 employees are critical to business operations, performing “essential accounting, cash and digital asset management, IT infrastructure, legal and other debtor-essential functions.”
The court filing also addressed concerns raised by the US Trustee’s Office, which oversees the administration of bankruptcy records and private trustees as a component of the Justice Department.
U.S. administrators objected to KERP’s proposal, saying the list of employees drawn up for retention payments could include “insiders” and that Voyager had failed to provide sufficient evidence to justify the proposed bonuses.
U.S. Bankruptcy Judge Michael Wiles ultimately approved the motion for the KERP payouts, accepting Voyagers’ legal team’s assertion that none of the bonus recipients have been named, serve or report to the board. of directors and does not have control of the management of the company.