Creditors of the embattled Voyager Digital are objecting to the crypto lender’s plans to give retention bonuses to its ‘key’ staff. The creditors argue that the crypto lender has not provided sufficient reasons as to why they need to make the payments.
The creditors are concerned that despite the crypto lender facing financial difficulties that have seen it file for bankruptcy, it has not taken measures to reduce headcount like other crypto firms. Some of the crypto firms that have reduced headcount in this crypto meltdown season include Bitpanda, Coinbase, Blockchain.com, and BlockFi among others.
Even after filing for Bankruptcy, Voyager still has 350 employees on its payroll. Only 12 employees voluntarily resigned after the firm filed for bankruptcy.
Through a filing made on Friday the creditors’ lawyers wrote:
“The foregoing companies are still operating in the ordinary course of business, while the Debtors’ [Voyager] platform has been essentially frozen with no or minimal operations for the last seven weeks.”
Voyager’s employee retention plan
The objection by the creditors comes three weeks after Voyager filed a motion requesting the approval of a “key employee retention plan” (KERP) worth $1.9 million.
According to the retention plan, Voyager marked 38 employees as vital for the business citing “valuable institutional knowledge” that would be expensive to swiftly replace. These employees are mostly involved with accounting, cash and digital asset management, IT infrastructure, legal, human resources and other functions in the firm.
However, the creditor committee isn’t convinced that the 38 key employees need any retention bonuses. The committee believes since Voyager is now limited to only routine maintenance and updates, these functions can be carried out by a small number of employees.
The creditors said:
“First, given the downturn of the cryptocurrency industry as a whole, the job market is relatively barren. Second, given the recent reductions and layoffs across the industry, a bevvy of recently-terminated professionals could fill their roles. The facts and circumstances do not support a KERP in these Chapter 11 Cases.”
The court case filed by the creditors’ committee is scheduled for hearing on August 24 10 AM ET.