Creditors of Bankrupt Voyager Digital Oppose Company Giving Out Bonuses to Employees

A beleaguered cryptocurrency brokerage firm has been accused of seeking payments of around $2 million as part of an employee retention package.

according to the new filing Attorneys speaking on behalf of a group of unsecured creditors in New York bankruptcy court are challenging Voyager Digital’s proposed Key Employee Retention Plan (KERP).

At a time when thousands of creditors are struggling to pay their basic personal expenses due to flaws in their business models, debtors are now trying to pay bonuses to their already well-compensated employees. doing.

Despite the heartache of customers, many of which are documented in dozens of letters filed on the docket, the debtor has taken no steps to reduce personnel. This is in stark contrast to how some of the most prominent cryptocurrency companies have reacted since the crypto winter began.

According to court documents, Voyager’s plan includes the following provision and seeks permission to spend up to $1.9 million in employee compensation.

Participants consist of 38 employees who perform a variety of functions, including accounting, cash and digital asset management, IT infrastructure, legal and human resources.

Pursuant to KERP, the debtor seeks authority to make two equal cash payments to the participants representing 25% of each participant’s annual income

The new filing questions whether the plan passes the “sound business judgment” test, whether the cost of the bonus is reasonable under Voyager’s current circumstances, and what due diligence was done before the proposal. I’m here.

The document concludes:

“The motion should be denied because the facts and circumstances do not support paying participants outside of the normal course of business.”

In early July, Voyager suspended all trading, deposits and withdrawals for its clients after its prominent borrower, crypto hedge fund Three Arrows Capital (3AC), failed to repay hundreds of millions of dollars worth of loans.

A few weeks later, the US Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) accused the company of misrepresenting its deposit insurance status in violation of the Deposit Insurance Act.

Earlier this month, Voyager received court approval to allow customers to resume cash withdrawals.

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