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• Voyager wants to retain key employees with bonuses
• Creditors see no signs of an impending wave of layoffs
• Bankruptcy claims millions of dollars in savings for business expenses
After creditors tried to stop a bonus payment to employees of the insolvent crypto exchange Voyager Digital, the responsible New York bankruptcy court has now ruled.
criticism of the creditors
Initially, part of Voyager Digital employees’ total remuneration consists of a share award. With the loss in value of the shares and the planned cancellation of employee shareholdings in the “Key Employee Retention Plan” (KERP), employees are currently being paid below market value, according to the cryptobroker’s argument.
Delisted from the Toronto Stock Exchange and currently only traded over-the-counter (OTC) in the US, the ailing crypto platform’s stock has lost a whopping 98.72 percent of its value year-to-date and is currently trading at $0.15 (the closing ) 09/02/2022).
The argument that the 38 employees in question were essential to the company was criticized as insufficient by the US Bankruptcy Protection Office. The creditors’ filing states: “The debtors have not presented evidence to justify the retention bonuses, other than conclusive statements that these employees are needed. Most importantly, the debtors have not presented evidence that the 38 employees are at risk of resigning. The application date is only 12 of the debtors’ approximately 350 employees voluntarily resigned.”
The office, which represents creditors’ rights, complained that the bonuses were neither necessary nor justified and sought to prevent the payments. The central fear is also that so-called “insiders” will benefit from the premium payments.
approval of payment
The responsible New York bankruptcy court has now rejected the request of the creditors. After reaching an agreement with creditors, the crypto broker is now allowed to distribute $1.9 million to key non-executive employees as part of the KERP plan filed on August 2.
The bonus is in cash and must be paid out in two installments according to the court order, provided that the employee in question is continuously employed at the time of payment. It appears from the court documents that the amount of the award is 22.5 percent of the employee’s annual salary. 44.4 percent of the KERP premium (corresponding to 10 percent of the annual salary) is paid after 12 months, the first slightly larger installment immediately.
Insolvency despite billions in aid
The company filed for bankruptcy in early July after FTX co-founder and Bitcoin billionaire Sam Bankman-Fried tried to save the company with hundreds of millions in bailouts (cash and USDC stablecoins). Bankman-Fried firm Alameda Research also provided Voyager Digital with a revolving Bitcoin line of credit, which was around $300 million at the time.
A restructuring plan must now reverse the trend: the court’s order requires savings of $4.6 million in operating expenses elsewhere. Voyager Digital and its creditors now have until September 22 to take appropriate action.
Gearing must be between 2 and 20
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