US Bankruptcy Court Gives Voyager Go-Ahead To Pay Bonuses

US bankruptcy court gives Voyager the go-ahead to pay bonuses to key employees which will be meant as retention incentives. Voyager Digital is set to pay $1.9 million in these retention bonuses to their key staff members in order to ensure that their operations continue throughout the legal proceedings.

On August 2, the business filed an application with the United States Bankruptcy Court requesting approval for its Essential Employee Retention Plan (KERP), which included $1.9 million in payments to 38 key workers considered critical to the exchange’s continued functioning.

Creditors of the company, which declared bankruptcy in July 2022, first rejected Voyager’s KERP payments in a court statement on Aug. 19, stating that payments to investors should take precedence over payments to “well-compensated” staff.

According to court records, Voyager and the creditors’ committee agreed to remove their opposition to the proposed KERP under specific circumstances. The most significant of them is the deployment of operational cost-cutting initiatives that will save $4.6 million. The KERP payments are equal to 22.5% of the yearly salary of qualifying employees. Because of this, the US bankruptcy court gave Voyager the go-ahead to pay these retention bonuses to their key employees.

The 38 workers, according to Voyager, are important to corporate operations, handling necessary accounting, cash and digital asset management, IT infrastructure, legal, and other critical activities for the Debtors.

The court brief also addressed concerns expressed by the U.S. Trustee’s Office, a component of the Department of Justice that regulates the administration of bankruptcy proceedings and private trustees.

The US Trustees objected to the KERP plan, alleging that the list of workers selected for retention pay-outs may have included “insiders” and that Voyager had not supplied sufficient data to warrant the proposed incentives.

U.S. Bankruptcy Judge Michael Wiles eventually allowed the KERP compensation request, agreeing with Voyagers’ legal team that none of the bonus recipients were selected, sit on, or report to the board of directors, and have no management authority over the firm.

Other Voyager News

In recent news, Voyager has asked the court to dismiss a class action lawsuit that investors filed against Mark Cuban. The class action lawsuit stated that Cuban’s actions were misleading and that he made intentionally false representations and encouraged young and inexperienced investors to enter the Voyager “Ponzi Scheme”.