Voyager Gets Go-Ahead to Pay $1.9M Bonuses to Key Staff Members
- Voyager filed for bankruptcy in July as a protective measure, having been affected by the stormy crypto market.
- Creditors initially opposed Voyager’s request to disburse $1.9 million in payment to its “key employees.”
Bankrupt crypto lender, Voyager, has been granted permission by a New York bankruptcy court to pay bonuses to its key employees. Earlier this month, the brokerage company filed a request with the United States Bankruptcy Court for approval of its Key Employee Retention Plan (KERP), which would see it disburse $1.9 million in payments to 38 employees that are allegedly crucial to its ongoing operation.
The request was met with stiff opposition from creditors, who felt that Voyager should prioritize payments to investors before its staff. However, court filings show that Voyager reached an agreement with its creditors, allowing it to move ahead with its proposed KERP under certain conditions. Based on the agreement, Voyager would have to implement operational cost-cutting strategies to save $4.6 million. The payment plans equal 22.5% of the annual salary of the qualified employees.
The crypto brokerage firm claims that the 38 key employees are crucial to its operations since they handle key accounting, financial and digital asset management, IT infrastructure, legal, and other debtor responsibilities. Emphasizing the importance of these employees, Voyager wrote,
The KERP was developed with the goals of (i) retaining employees critical to ensuring continued maintenance of customer accounts and the platform more generally, even while in “sleep mode,” and (ii) ensuring that a value-maximizing transaction—whether pursuant to a standalone restructuring or sale—is effectuated.
The petition for the KERP payments was granted by U.S. Bankruptcy Judge Michael Wiles, who agreed with Voyagers’ legal counsel that none of the recipients of the bonuses were chosen, sat, or reported to the board of directors.
Voyager was severely impacted by the recent crashes in the crypto market and announced on July 1, 2022, that it had halted all trading, deposits, withdrawals, and loyalty programs for users. Shortly after the suspension, the company received a flurry of demands from clients asking to be allowed to withdraw their money. Voyager opted to file for bankruptcy as a protective measure. The company and its U.S. affiliates filed for Chapter 11 bankruptcy on July 6.
Voyager has disclosed plans to finalize a sale process by September 2022. Several firms have reportedly shown interest in purchasing some of Voyager’s crypto assets. Notably, Sam Bankman-Fried-owned FTX made Voyager an offer for its assets in exchange for the right for Voyager’s clients to use the returns to create accounts on FTX. However, Voyager rejected the offer, which it said was only in FTX’s interest.