Voyager creditors oppose $1.9M employee retention proposal
Voyager Digital Holdings’ committee of unsecured creditors has filed a motion to object to the firm’s proposal to keep its employees by paying them monetary awards for staying in the company.
On August 2, Voyager Digital filed a motion to the United States Bankruptcy Court in the Southern District of New York to approve the Key Employee Retention Plan (KERP) that aims to distribute $1.9 million to 38 key employees who were deemed to be very crucial to the operations of the exchange.
However, the exchange’s creditors disagreed with the proposal. In a motion filed on August 19, the creditors laid out their objections to the proposed KERP and its related relief grants. They wrote:
“At a time when thousands of creditors struggle to pay basic personal expenses due to the Debtors’ flawed business model, the Debtors now seek to pay bonuses to their already well-compensated employees.”
The creditors also argued that Voyager was unable to give enough reason to justify the retention plan. Additionally, the creditors said that there isn’t enough evidence given to show that the employees who were part of the retention plan are truly planning to resign.
Apart from these, the filing made by creditors also noted that the current crypto winter allows the firm to hire from a pool of talent who are now available. “Given the recent reductions and layoffs across the industry, a bevy of recently-terminated professionals could fill their roles,” they wrote.
Earlier this month, billionaire Mark Cuban was sued for promoting Voyager products. A law firm filed a civil suit against Cuban and demanded a jury hearing for the case. The lawsuit alleged that Cuban used his experience to dupe investors into putting their life savings at Voyager.
In July, the crypto exchange filed for bankruptcy, mentioning that the firm owes money to more than 100,000 creditors. According to the firm, this move is part of a recovery plan that aims to return value to its customers when implemented.