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Voyager creditors say ‘no’ to lender ‘retention’ bonuses for employees

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Voyager creditors say ‘no’ to lender ‘retention’ bonuses for employees
Source: AdobeStock / Rafael Henrique

Creditors of troubled crypto lender digital travel opposed the company’s motion to pay employees “retention bonuses”, saying it should instead cut “headcount” to cut costs.

The Official Committee of Unsecured Creditors, a group of Voyager customers, said in a recent legal deposit this,

“At a time when thousands of creditors are struggling to pay basic personal expenses due to debtors’ flawed business model, debtors are now looking to pay bonuses to their already well-paid employees.”

Creditors also slammed Voyager for failing to take steps to downsize and cut expenses, noting that some top crypto companies have laid off between 20% and 30% of their workforce in a bid to survive the current “crypto winter”.

“To be clear, the aforementioned companies are still operating in the normal course of business, while the debtors platform has essentially been frozen with no or minimal operations for the past seven weeks,” the creditors added.

The filing came after Voyager asked a federal judge to approve $1.9 million of its funds for a “key employee retention plan” (KERP), or bonuses to 38 employees who, according to the business, perform “essential accounting, cash and digital asset management, IT infrastructure, legal, and other debtor-critical functions,” according to a filing on August 2.

However, creditors said Voyager had provided no evidence to prove the 38 employees were needed and were at risk of quitting.

“And that’s because no such evidence exists – since the date of the petition, only 12 of the debtors’ approximately 350 employees have voluntarily resigned,” the creditors claimed.

As noted, Voyager deposit for bankruptcy protection in July after suffering massive losses following crypto hedge fund failure Capital of the Three Arrows (3AC) and the broader crypto meltdown. The lender has since received “several offers for its assets beyond a previous offer” of the crypto exchange FTX and its parent company Alameda Search.

Earlier this month, the crypto lender said it plans to “restore access” to dollar cash deposits by August 11. He said customers with cash in their accounts could withdraw up to $100,000 in a 24-hour period.

Meanwhile, Celsius (CEL)another bankrupt crypto lender, posted a report last week, which showed that the company was in default of about $2.8 billion in its crypto obligations to customers. The filing also showed that the restructuring process and other expenses were costing the company an average of $46 million per month.

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Learn more:
Big week for Voyager Digital customers as cash withdrawals are about to begin
Voyager Digital can reimburse customers with $270 million MCB Holdings, judge the rules

US government agencies slam Voyager’s ‘false and misleading claims’ on deposit insurance
FTX’s Acquisition of Voyager Is “Not Necessarily Dead”, Says Sam Bankman-Fried

Why Celsius and Voyager were more like uninsured quasi-banks
How to spot the next degree Celsius before it’s too late

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