Insolvent crypto brokerage Voyager Digital got the US bankruptcy court approval to pay retention bonuses to key employees.
The crypto lender filed a motion with the US Bankruptcy Court on Aug 2 seeking approval for its Key Employee Retention Plan (KERP) to pay $1.6 million worth in bonuses. The bonuses equals 22.5% of each employee’s annual salary.
The payouts will go to 34 Voyager employees deemed critical to the exchange’s future plans. Creditors of the firm initially opposed Voyager’s Key Employee Retention Plan in a court filing that took place on Aug 19. They argued that payments to investors should be prioritized over “well-compensated” employees.
As per the court filings, an agreement was reached between Voyager and the committee of creditors to drop the opposition to the KERP on certain conditions. The creditor committee dropped its objection after Voyager agreed to take steps including cost-cutting measures to save $4.6 million.
The key employees perform essential accounting, digital and cash asset management, IT infrastructure, legal, and other critical functions for the debtors, says Voyager Digital.
The court filing also recognized the concerns raised by the US Trustee’s office which oversees the administration of bankruptcy cases and private trustees as a part of the Department of Justice.
Also Read: Voyager Digital to Return $270M to Customers on Approval
The US Trustees objected that the list of employees set for retention pay-outs may have included “insiders” and Voyager had not yet provided enough evidence to justify its KERP proposal.
However, the US Bankruptcy Judge Michael Wiles approved the motion for KERP payout. He agreed with Voyagers’ legal team’s assertion that none of the beneficiaries have managerial control over the company, neither they are appointed, report, or sit to the board of directors.
