New Jersey bankruptcy court Judge Michael Kaplan approved crypto lender’s BlockFi motion to pay its staff up to $10 million in a “retention program,” according to a Jan. 27 filing.
Court filing showed that BlockFi could pay its staff a $9.98 million in three installments over a 12 months period. The bankrupt firm payment was divided into two tiers: the first pays the staff 42.5% of their base salary while the other pays them 9% of their base salary.
Meanwhile, the court filing did not state the number of employees eligible for the bonus nor did it state the qualification for either of the tiers. Media reports have tied the number of employees at the firm to 130.
Why the Bankrupt Firm Wants to Pay its Staff Bonus
The bankrupt crypto lender previously argued that it needed to pay its staff the bonus so that it could retain their services throughout the bankruptcy proceedings.
According to BlockFi’s Chief People Officer Megan Crowell, there was a raging war for talents and it staff “have many opportunities inside and outside the cryptocurrency sector.”
However, BlockFi’s unsecured creditors argued that the proposed bonus was “broader and more expensive than other crypto cases.”
Separately, other bankrupt crypto firms like Celsius and Voyager had also requested retention programs for their employees. Both firms argued that the payment would help to retain the services of the scarce talents their employees offered.
Other Updates From BlockFi’s Bankruptcy
Recent financial documents have revealed that BlockFi had a $1.2 billion exposure to bankrupt crypto firms FTX and Alameda Research. The bankrupt lender filing showed $415.9 million in assets on FTX and $831.3 million in loans to Alameda. Besides that, the firm had 662,427 users, and over 70% had balances less than $1,000.
Additionally, Bloomberg reported on Jan. 23 that the lender planned to sell $160 million in loans collateralized by 68,000 mining machines. The lender’s business, alongside other miners, was severely hit by Bitcoin’s record-low 2022’s decline.
Also, the lender laid claim to Sam Bankman-Fried’s Robinhood shares before it was seized by US authorities. According to the lender, the stocks were pledged as collateral for a loan it gave to Alameda.
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