Voyager wins bankruptcy court approval to pay $1.6 million in employee bonuses

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Voyager Digital Ltd has been authorized to pay $1.6 million in bonuses to 34 employees deemed critical to the future of bankrupt digital asset lenders. US Bankruptcy Judge Michael Wiles gave his approval following a hearing.

According to a Bloomberg report, the approval will also allow for the non-disclosure of employee names. However, according to court documents cited by the outlet, none of the redacted names is a senior leader.

Beneficiaries were identified as those working in areas such as accounting and information technology. Based on available information, the “retention reward” package is equivalent to 22.5% of the workers annual salary.

Meanwhile, the report notes that the hearing was not smooth. The official committee of creditors attacked the bonus plan after Voyager filed a petition to pay $1.9 million in bonuses to 38 employees earlier this month. The US Trustee’s Office, a bankruptcy watchdog under the Justice Department, also objected to the redaction of the names and titles of potential recipients.

The creditors’ committee dropped its objection after Voyager agreed to cut the package and take steps to reduce costs in other areas to $4.6 million a year. Similarly, Judge Wiles softened the objection of the trustee’s office by insisting that the approval was necessary to help Voyager maximize its business and recoveries from creditors by preventing critical employees from quitting.

Still no reprieve for the majority of users who have invested with Voyager

This approval is the second time that Voyager has received the green light from the bankruptcy court to settle some of its obligations. Earlier this month, Voyager was granted approval to return $270 million it was holding in cash to customers. It has returned around $219 million, or 80% of that amount so far.

However, more than $1 billion in investor money has remained stuck with the lender since it filed for bankruptcy in July, citing the slowdown in the digital asset market. Voyager was affected by the crash of 3AC, which was, in turn, affected by the downfall of the Terra ecosystem.

Investors who held digital assets with the platform have not been able to recover any of their investments since the saga began. Most of them also have little hope of recovery because Voyager is not insured by the Federal Deposit Insurance Corporation (FDIC). The FDIC and the Federal Reserve have accused Voyager of making false and misleading statements regarding its deposit insurance status.

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