Voyager Creditors Object to Bankrupt Firm’s Plan to Reward Key Staff

Creditors don’t believe Voyager’s key employees need to be incentivized with a $1.9 million package in a tough job market

article-image

Blockworks exclusive art by axel rangel

share

key takeaways

  • The lender took no measures to reduce headcount, the creditor committee said
  • There’s no evidence that “key” employees would resign, they added

Creditors of bankrupt Voyager don’t want the lender to pay retention bonuses to employees, arguing the firm hasn’t provided reasons why the payments are required.

They also raised issues with Voyager making no efforts to reduce its headcount while other firms like Coinbase, Bitpanda, BlockFi and Blockchain.com have each laid off roughly 20%, a filing on Friday showed. Even after initiating bankruptcy proceedings, Voyager still has 350 employees on payroll.

“The foregoing companies are still operating in the ordinary course of business, while the Debtors’ [Voyager] platform has been essentially frozen with no or minimal operations for the last seven weeks,” lawyers representing the committee wrote.

Their objection comes about three weeks after Voyager submitted a motion requesting a judge to approve a “key employee retention plan” (KERP) costing $1.9 million. 

Under that program, Voyager marked 38 employees as vital to the business due to “valuable institutional knowledge” that would be expensive to replace swiftly. They would execute accounting, cash and digital asset management, IT infrastructure, legal, human resources and other functions for the firm, according to the motion.

But the creditor committee isn’t convinced that the 38 key employees need retention bonuses, as Voyager provided no evidence that they could resign. Further, only 12 employees have voluntarily resigned since its bankruptcy filing, they pointed out.

“This lack of attrition is attributable to the current employment market in the cryptocurrency space as a result of the aforementioned industrywide layoffs,” they said.

A Voyager spokesperson declined to comment on the matter.

The committee argues that work at Voyager is now limited to only routine maintenance and updates. They believe these can be carried out by the current employee base as long as the attrition rate is low.

“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.”

A court hearing on the motion is scheduled to take place on August 24 at 10 am ET.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (6).png

Research

In recent months, a number of highly accretive developments were implemented across the protocol to improve fee capture, expand product functionality, and ultimately drive value accrual to the RUNE token, with more upgrades on the immediate horizon. These developments include hiking the minimum swap fee parameter to increase revenue, adding a Burn System Income Lever to reduce the RUNE supply, the addition of COSM-WASM smart contracting and IBC to enable an application layer, new chain integrations, and more.

article-image

A repayment plan has officially been approved, nearly two years after FTX went bust

article-image

Coinbase filed an interlocutory appeal in its case against the SEC earlier this year

article-image

FTX “never had the crypto” to make in-kind distributions, witness says at FTX’s confirmation hearing

article-image

Lucid Ventures co-founder Meta said they don’t think Solana is “abnormal” in the VC world, where it’s “standard” for many projects to fail

article-image

Plus, Polymarket hits all-time highs in daily trading volumes

article-image

Bitcoin is now in the second half of its bull market, if the previous ones are anything to go by