The New York Bankruptcy Court has allowed cryptocurrency broker Voyager Digital to pay bonuses under the Key Employee Retention Plan.
In early July, Voyager Digital filed for bankruptcy due to a lack of liquidity, leaving it free to restructure its debt obligations. In August, the company filed in a US bankruptcy court seeking approval for a Key Employee Retention Plan (KERP), which provides for $1.9 million in payments to 38 key employees. Voyager management claims that these people make a significant contribution to the work of the company, performing accounting, managing cash and digital assets. In addition, these employees deal with legal issues and IT infrastructure.
But last week, the bankrupt company’s creditors opposed Voyager Digital paying any bonuses to employees, arguing that payments to investors should be prioritized. Lenders fear insiders may be among these select employees and believe that Voyager Digital lacks a compelling case for the bonuses offered.
Ultimately Bankruptcy Judge Michael Wiles
approved Voyager Digital solicitation. He agreed with the statement of the company’s lawyers: the payment of bonuses will ensure that Voyager can continue to work as part of the bankruptcy proceedings. The court took into account that none of the bonus recipients was on the company’s board of directors or engaged in managerial control. An agreement has been reached between the company and the committee of creditors to waive the objections to KERP, which must be implemented under certain conditions. The main one is the reduction of operating expenses, which saves $4.6 million. KERP payments are 22.5% of the annual salary of key employees.
Earlier, the cryptocurrency broker rejected the help of the FTX trading platform, calling it mercenary, and in early August announced that it would return deposits totaling $270 million to users.