Celsius Trustee Rejects Motion For $3 Million Employee Bonus
The Trustee has opposed to the retention bonus, claiming that there is insufficient evidence in the motion to support such a significant payout and that it is unclear which individuals could be regarded as insiders.
William Harrington, the U.S. Trustee in charge of the Celsius chapter 11 bankruptcy case, has objected to a move by the company that would have paid 62 of its 275 employees a retention bonus worth $2.96 million.
The Trustee has blasted Celsius in its supporting statement for the objection filed on Oct. 27, noting:
“It defies logic, not to mention the Bankruptcy Code, that a company where the majority of its functions are no longer providing services, would now propose a multi-million dollar bonus scheme.”
The Trustee asserts that Celsius must demonstrate that the incentives are reasonable in light of the case’s facts in order for the “bonus motion,” as it is appropriately dubbed, to be approved.
Trustee asserts that Celsius has failed to do so in the absence of any quantifiable indicators
Although the issue does not imply that Celsius employees do not deserve a KERP, it does point out that the information Celsius supplied was insufficient to support such a high amount.
The purpose of KERPs is to inspire workers to support a successful restructuring outcome. Even though increasing executive pay before a possible reorganization may appear illogical, it frequently serves the interests of all stakeholders.
The details of the KERP recipients have not been made public, in contrast to the personal information of the Celsius creditors, with an unredacted breakdown only being given to the court, the Official Committee of Unsecured Creditors, and the Trustee.
That has also been disputed by the Trustee, who claims that other interested parties are unable to debate whether the participants may be viewed as insiders, in which case they would not be qualified for a KERP.
Celsius had submitted the bonus motion on October 11th, and a hearing regarding the proposal and associated relief was scheduled for November 1st.
In the meantime, the lender is also held accountable for the financial difficulties experienced by Bitcoin miner Core Scientific, which asserted on October 19 that since Celsius filed for chapter 11 bankruptcy on July 13, it has refused to pay its bills, costing Core Scientific about $53,000 per day.
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