US court has given Voyager permission to pay bonuses to key employees

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Last Updated on August 26, 2022 by Bitfinsider

A New York bankruptcy court has approved the payment of retention bonuses to key employees by the embattled cryptocurrency brokerage Voyager Digital.

On August 2, the firm filed a motion with the United States Bankruptcy Court seeking approval for its Key Employee Retention Plan (KERP), which included $1.9 million in payments to 38 key employees identified as critical to the exchange’s continued operation.

Creditors of the company, which declared bankruptcy in July 2022, initially opposed Voyager’s KERP payments in a court filing on Aug. 19, claiming that payments to investors should take precedence over payments to “well-compensated” employees.

According to court filings, Voyager and the creditors’ committee agreed to drop their opposition to the proposed KERP under certain conditions. The most significant of these is the implementation of operational cost-cutting measures that will save $4.6 million. The KERP payments are equal to 22.5% of the annual salary of eligible employees.

The 38 employees, according to Voyager, are critical to business operations, performing “essential accounting, cash and digital asset management, IT infrastructure, legal, and other critical functions for the Debtors.”

The court filing also addressed concerns raised by the U.S. Trustee’s Office, a component of the Department of Justice that oversees the administration of bankruptcy cases and private trustees.

The Trustees of the United States objected to the KERP proposal, claiming that the list of employees set for retention pay-outs may have included “insiders” and that Voyager had not provided sufficient evidence to justify the proposed bonuses.

U.S. Bankruptcy Judge Michael Wiles eventually approved the KERP payout motion, agreeing with Voyagers’ legal team that none of the bonus recipients were appointed, sit on, or report to the board of directors, and have no managerial control over the company.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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