Creditors of Voyager Digital Resists Retention Bonuses For Essential Workers

Customers of bankrupt crypto lender Voyager Digital have objected to the move by the lender to pay 38 of its employee retention benefits. This was revealed in a recent legal filing.

An August 2 legal filing in the U.S Bankruptcy Court for the Southern District of New York reveals that the Crypto brokerage firm has approached the judge to approve the Key Employee Retention Plan (KERP). The lender is seeking approval to pay $1.9 million of its fund to employees it described as essential to its operations. 

According to the August 2 filing, the workers carry out critical functions for the lender which include, essential accounting operations, cash, and digital asset management, IT infrastructure as well as legal functions. At the time, it said losing these workers would hurt its restructuring plans.

Creditors Say Voyager Digital Hasn’t Done Enough

In response to the lender’s request, a committee of unsecured creditors of the lender on the 19 of August, filed a motion objecting to Voyager’s request. The creditors argue that the employees are already well compensated and the firm has done little to scale back its price.

Furthermore, the committee said that the lender has not given enough reason for it to implement the KERP beyond saying that the employees are essential. It also added that there was no evidence suggesting the said workers were planning to resign.

In addition, the creditors say there is currently a pool of professionals available for the firm to recruit from following the recent massive layoffs that have characterized the crypto ecosystem in recent months. 

Therefore, according to the creditors, the circumstances of the voyager’s case do not support KERP.

Owing to the failure of its debtors to pay back their loans and the extended volatility of the market, the US-based crypto lender has hit a rock. Days after halting trading, withdrawals, and deposits on its platform, It filed for chapter 11 bankruptcy in July as it looks to begin a restructuring process.

Subsequently, the lender rejected offers from FTX’s investment arm Alameda Ventures for a liquidity cushion during its market turbulence. It said carrying on with the deal will ruin chances of securing other deals and hurt investors.

The U.S Bankruptcy Court for the Southern District of New York has scheduled a hearing on the motion for August 24, 2022.

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