More than 30 employees at bankrupt cryptocurrency exchange Voyager have been awarded a $1.6 million bonus as the company scrambles to return client funds frozen on its platform.

Bankruptcy court judges in southern New York approved Voyager’s motion to hire key employees this week. Voyager argued it must reward top talent to retain them while the company restructures its financial assets. As part of the Key Employee Retention Plan (KERP), 34 of 328 employees receive an additional 22.5 percent of their annual salary, which corresponds to $1.6 million.

These employees provide services that are considered essential to the company, such as accounting, IT infrastructure, legal and the like. “[Voyager] Employees have reasonable grounds to be concerned about their long-term employment status given the ongoing sales process and the uncertainty of future deals,” the company’s attorneys said in court filings [PDF].

“And key employees are necessary, whether it’s a sale or a stand-alone reorganization. To confirm a standalone plan, [Voyager] will obviously need these employees to function [its] Go-forward business… Ultimately, retaining key employees is critical to successfully completing each transaction that delivers value to customers.”

Voyager had asked judges to approve a total of $1.9 million in bonus payments for 38 employees, and that kind of request is standard for companies that have gone bust and need some kind of manpower to clean up the mess. However, the official Unsecured Creditors Committee, appointed to represent those who are owed money, disagreed. The committee criticized Voyager for attempting to reward employees when consumers had not yet been compensated for their losses, and said it provided no evidence that employees would quit without the additional pay.

“At a time when thousands of creditors are struggling to pay for basic personal expenses due to debtors’ flawed business model, [Voyager] now trying to pay bonuses to their already well-paid employees… It’s hard to see how KERP is “necessary and proportionate to avoid costly business disruption [Voyager’s] business and allow debtors to resume operations after the emergency,’ debtors claim,” court documents said [PDF].

The committee went so far as to argue that employees are unlikely to be resigning given the “relatively barren” job market in the cryptocurrency industry given recent layoffs from companies like Coinbase. However, Voyager and creditors reached an agreement on the bonuses when the cryptocurrency exchange vowed to reduce total bonus payments to $1.6 million and cut other costs to save $4.6 million elsewhere.

Voyager has returned about $219 million, or 80 percent of funds, to customers who kept their funds in-store as cash, a company lawyer said. according to to Bloomberg. But those who have cryptocurrencies stored in their accounts have yet to be compensated.

The enterprise said Consumers could now start filing claims for their crypto coins. Earlier this month, judges gave the company permission to pay back $270 million to customers. ®

https://www.theregister.com/2022/08/25/voyager_bankrupt_payouts/ Crypto Exchange Voyager Pays $1.6M Bonus to Key Personnel • The Register

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