Trustee handling the Celsius bankruptcy case rejects employee bonus QuoteCoin
New York City: The trustee has raised objections to the retention bonus, arguing that the motion does not include sufficient facts to justify such a large compensation and that there is insufficient clarity about whether any of the beneficiaries should be deemed insiders.
William Harrington, the United States trustee who is in charge of managing the Chapter 11 bankruptcy case for Celsius, has raised objections to a motion made by Celsius that would have given 62 of the company’s 275 workers a retention incentive with a total value of $2.96 million.
According to the trustee, in order for the “bonus motion,” which has been given an apropos moniker, to be granted permission, Celsius must demonstrate that the incentives are acceptable in light of the circumstances of the case. The trustee believes that Celsius has failed to do so notwithstanding the lack of any observable measures.
Although the criticism does not imply that workers of Celsius do not merit a key employee retention program (KERP), it does point out that the information presented by Celsius is inadequate to warrant such a significant amount of money.
KERPs are meant to incentivize workers in order to facilitate a successful result of the restructuring process. In spite of the fact that increasing CEO compensation in advance of a prospective reorganization may seem to be paradoxical, doing so is often in the best interest of stakeholders.
The court, the Official Committee of Unsecured Creditors, and the trustee are the only parties who have been given an unredacted breakdown of the KERP beneficiaries’ information. This is in contrast to the personal information of Celsius creditors, which has been made public.
The trustee has a problem with it as well, arguing that other interested parties are unable to debate whether or not the participants may be deemed insiders, which would make them ineligible for a KERP. KERP stands for Key Employee Retirement Plan.
The bonus motion had been submitted by Celsius on October 11th, and a hearing on the proposal and any associated relief was scheduled to take place on November 1st.
The lender is also being blamed for causing financial distress at miner Core Scientific, who claimed on October 19 that Celsius has refused to pay its bills since it filed for Chapter 11 bankruptcy on July 13, resulting in approximately $53,000 in daily losses for Core Scientific. Meanwhile, the lender is being blamed for causing financial distress at Core Scientific.
