According to a new legal filing, creditors of crypto lender Voyager Digital do not believe the company needs to pay employees “retention awards”.
The cash-strapped firm is currently undergoing bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York. However, they asked a federal judge to approve a “Key Employee Retention Plan” (KERP), which meant bonuses to 38 employees of the company.
The total amount of the KERP was $1.9 million. The company stated that these employees were vital to its continued operation and restructuring.
However, a group of Voyager customers called the Official Committee of Unsecured Creditors objected to this plan and said in the filing, “The Debtors have not provided any evidence to justify the retention awards beyond conclusory statements that these employees are needed.”
It further stated, “Importantly, the Debtors provide no evidence that the 38 Participants are at risk of resigning. And that is because no such evidence exists – since the Petition Date, only 12 of the Debtors’ approximately 350 employees have voluntarily resigned.”
In its filing for KERP, Voyager said “The KERP allows the Debtors to retain certain critical non-insider employees and is consistent with retention programs in similar chapter 11 cases. The KERP provides for payment of cash retention awards to 38 of the Debtors’ non-insider employees.”
The employees described as being “non-insider”, apparently meaning non-executive employees.
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Moreover, Voyager’s CEO Steven Ehrlich said that this is “non-public, personal and/or sensitive information” and asked the court to allow his company to redact the names, titles, salaries, supervisors’ names and proposed bonuses for the 38 employees.
The U.S. Trustee’s Office filed in opposition to Ehrlich’s request. The Trustee’s filing argued that this is critical information which is necessary for the creditors and the interested parties in order to evaluate the Bonus Motion.
It also further said that “based on the United States Trustee’s review of the unredacted information, one or more of the KERP Participants may well be classified as an insider.”
A hearing for the motion will be held by the bankruptcy court on August 24.
