- 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.