A $10 million pay and bonus package for staff of crypto lender BlockFi was approved today by New Jersey bankruptcy court Judge Michael Kaplan.
The ruling comes after court documents revealed executives from the crypto lender were granted pay raises of as much as $275,000 each after the company sought a bailout from crypto exchange FTX in June 2022. Dependent on FTX for a $400 million line of credit, BlockFi filed for Chapter 11 bankruptcy protection shortly FTX did the same in November.
This new deal applies to around 130 staff, who will mostly get a bonus worth 42.5% of salary, paid in three installments over a year. Worth $9.98 million, this package is the right way to secure value for former customers, lawyers for BlockFi told the court.
“It's essential that the debtors institute these retention programs to keep critical workers with the company,” Rush Howell of law firm Kirkland & Ellis told the court, adding that roughly 10% of staff had left since BlockFi declared bankruptcy on Nov. 28. “These retention programs are critical to the debtors’ success … maximizing recoveries to stakeholders.”
Judge Michael Kaplan said he was “happy to approve” the plan, after objections to it based on a lack of details were withdrawn by the U.S. Trustee, a branch of the Department of Justice.
Court filings say the package won’t apply to company “insiders,” a legal term which encompasses directors, officers and their families.
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