United States trustee objects to cryptocurrency-based Celsius’ bonus motion

William Harrington, trustee, United States, who is responsible for overseeing the Celsius Chapter 11 bankruptcy case, has made objections towards the Celsius motion for seeing 62 of its 275 employees get paid a retention worth $2.96 million, as reported by Cointelegraph.

“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,” Harrington stated.

According to Cointelegraph, with respect to the “bonus motion,” Harrington made the claim that Celsius must show proof on account of the legitimacy of the bonuses, based on the facts of the case. Due to the reported absence of any identifiable metric, Harrington stated Celsius’ failure. While the objection doesn’t state any inference with Celsius employees not deserving of an essential employee retention program (KERP), it is believed to have highlighted that the information provided by Celsius isn’t enough to justify the mentioned amount. It is believed that KERPs are developed for employees’ motivation to ensure a restructuring outcome.

On the basis of information by Cointelegraph, unlike the personal information of Celsius creditors, details of the KERP recipients haven’t been revealed to the public. Only a breakdown has been provided only to the court, Official Committee of Unsecured Creditors and the Trustee. It is believed that the Trustee has raised an issue by claiming that other interested parties which are unable to argue should be seen as insiders, which could make them ineligible for a KERP. 

Moreover, Cointelegraph noted that on October 11, 2022, Celsius made the filing of a bonus motion, with a hearing on the proposal and related relief expected to take place on November 1, 2022. Meanwhile, the leader has also been blamed on account of creating financial problems at Bitcoin miner Core Scientific, who claimed on October 19, 2022, that Celsius refused to pay its bills since its bankruptcy filing.

(With insights from Cointelegraph)

Also Read: Fintech platform Stashfin appoints Ankit Rajpal as its senior vice-president – Engineering

Follow us on TwitterFacebookLinkedIn 

Leave a Reply

Your email address will not be published. Required fields are marked *