No to employee retention bonus bid. Those six little words carry a lot of weight and are of great importance for Voyager customers, who will do anything to stop the now-bankrupt company from throwing even more money down the drain.
No To Employee Retention Bonus Bid
According to a new legal file released late Friday, the creditors of cryptocurrency lender Voyager Digital do not feel the firm is required to pay staff “retention rewards.”
Voyager, which is now in bankruptcy proceedings in the United States Bankruptcy Court for the Southern District of New York, has sought a federal judge to allow $1.9 million of its money for a “Key Employee Retention Plan” (KERP), which consists of incentives to 38 workers who the firm claims are critical to its continuing operation and reorganization.
The Official Committee of Unsecured Creditors, a consortium of Voyager customers, complained on Friday, claiming that Voyager’s personnel are “already well-compensated” and that the business has done little to lower expenses.
Contents Of A Filling
“The Debtors have not provided any evidence to justify the retention awards beyond conclusory statements that these employees are needed. 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,” the filing said.
According to Voyager’s August 2 statement, the employees conduct important accounting, cash and digital asset management, IT infrastructure, legal, and other vital responsibilities for the Debtors.
“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,” according to the filling.
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What Voyager Says
Employees often have a strong stock component in their total salary, but the value of this equity “has cratered,” implying that employees are being paid less than market value. Furthermore, Voyager’s current reorganization proposal would result in the cancellation of stock interests, the business stated at the time. The loss of this personnel would jeopardize the company’s restructuring efforts, among other things.
These workers were referred to as “non-insiders,” implying non-executive staff.
The creditors argue that even if these individuals went for greater pastures, the industry’s recent cutbacks suggest they should be easily replaced.
As an extra twist, Voyager CEO Steven Ehrlich urged the court to allow his company to redact the names, positions, wages, supervisors’ names, and planned bonuses for the 38 workers, claiming that this information is “non-public, personal, and/or confidential.”
The court will hold a hearing on August 24 2022 to debate this motion.
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