Creditors of the insolvent Voyager do not want the lender to pay retention incentives to staff, claiming the company has not presented sufficient justification for the payments.
Bonuses worth $1.9M
A Friday filing revealed they were also concerned that Voyager hadn’t attempted to cut its employment. In contrast, companies such as Coinbase, Bitpanda, BlockFi, and Blockchain have each laid off around 20% of their workforce. Even after filing into bankruptcy, Voyager continues to employ 350 individuals.
Committee attorneys stated that the Debtors’ Voyager platform had been virtually stopped with no or minimum activities for the past seven weeks.
Their opposition comes almost three weeks after Voyager submitted a motion asking a judge to authorize a $1.9 million key employee retention plan.
Voyager Digital facing objections from its creditors. Image: metacrunch
Privacy for the 38 employees
Under this program, Voyager identified 38 personnel with crucial institutional knowledge who would be costly to replace quickly and at short notice. According to the motion, they would perform accounting, cash and digital asset management, IT infrastructure, legal, human resources, and other duties for the company.
However, the creditor committee is not persuaded that Voyager’s 38 essential workers require retention bonuses, as the company has offered no proof that they may depart. In addition, they noted that just 12 employees had willingly quit since the bankruptcy filing.
“This lack of attrition is a result of the aforementioned widespread layoffs in the bitcoin business,” they stated.
A spokeswoman for Voyager declined to comment on the situation.
The committee contends that Voyager’s operations are now restricted to regular maintenance and upgrades. As long as the attrition rate is modest, they feel the present workforce can complete these tasks.
“First, given the downturn of the cryptocurrency industry as a whole, the job market is relatively barren,” the creditors said. “Second, given the recent reductions and layoffs across the industry, a bevy of recently-terminated professionals could fill their roles. The facts and circumstances do not support a KERP in these Chapter 11 Cases.”
The motion will be heard in court on August 24 at 10 a.m. ET.