A New York bankruptcy court has given beleaguered crypto broker Voyager Digital the green light to pay key staff members retention bonuses..
The company filed a motion with the United States Bankruptcy Court on August 2, requesting approval of its Key Employee Retention Plan (KERP)which involves payments worth $1.9 million to 38 key employees who have been identified as crucial to the exchange’s ongoing operation.
Creditors of the company, which filed for bankruptcy in July 2022, had initially objected to Voyager’s KERP payments in a court filing on August 19.arguing that payments to investors should take precedence over “well-compensated” employees.
According to court documents, an agreement was reached between Voyager and the creditors’ committee to withdraw opposition to the proposed KERP with certain conditions. The main one is the application of measures to reduce operating costs to save USD 4.6 million. KERP payments are equal to 22.5% of the annual salaries of eligible employees.
Voyager maintains that the 38 employees are critical to business operationsperforming “essential accounting, cash and digital asset management, IT infrastructure, legal, and other critical functions for Debtors.”
The court filing also addressed concerns raised by the United States Trustee’s Officewhich oversees the administration of bankruptcy cases and private trustees as a component of the Department of Justice.
The US trustees opposed the KERP proposal on the grounds that the list of employees set for retainer payments could include “insiders” and that Voyager had not provided sufficient evidence to justify the proposed bonuses..
Bankruptcy Judge Michael Wiles finally approved the motion for KERP payments, agreeing with Voyager’s legal teamwhich claimed that none of the bond beneficiaries had been named, sat on or reported to the board of directors and had no management control of the company.
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