A New York bankruptcy judge has approved Voyager Digital’s plans to pay bonuses to staff the insolvent lender considers crucial to its future.
However, Judge Michael E. Wiles trimmed Voyager’s proposed amount from $1.9 million to $1.6 million.
Voyager’s counsel said they had concluded a deal to pay out bonuses to employees considered essential for the company, especially in the IT infrastructure, accounting, and legal departments.
“Employees have legitimate reasons to be concerned about their long-term employment status given the ongoing sale process and uncertainty of future operations,” the firm’s lawyers said in a court document.
Voyager creditors fight bonus plan
The court approval came amid protests from the Voyager Digital Holdings’ committee of unsecured creditors who are fighting the retention bonus plan saying the bid is at the expense of clients.
‘’The Debtors have not provided any evidence to justify the retention award beyond conclusive statements that these employees are needed. Importantly, the Debtors provide no evidence that the 38 Participants are at risk of resigning,” creditors claimed.
The creditors also rejected the lender’s defense for the need to pay hefty bonuses, saying there is no justification for their arguments that employees had resigned as claimed.
“At a time when thousands of creditors struggle to pay basic personal expenses due to the Debtors’ flawed business model, Voyager now seeks to pay bonuses to their already well-compensated employees,” they added.
Voyager Chapter 11 cases consolidated
On July 1, Voyager filed voluntary petitions for relief under Chapter 11 of the United Bankruptcy Code following a series of events in the cryptocurrency markets. Matters came to a head when Singapore-based Three Arrows Capital defaulted on a $650 million loan extended to it by Voyager. Three Arrows is also now being liquidated.
Voyager customers with crypto on the platform have yet to recover their funds. Those who had cash held by the company have fared better, however, with about $219 million, or 80%, being returned, a lawyer for Voyager said in the hearing.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.