- Celsius’s US Trustee objects to retention bonus motion.
- The trustee claims Celsius must prove the bonuses are reasonable.
- The hearing for the proposal is set for November 1.
A recent motion from Celsius claiming $2.96 million in retention bonuses for 62 of its 275 employees has been met with opposition from its U.S. Trustee William Harrington. The filing came in response to a motion from Celsius filed on October 11th. The Trustee seeks justification before such a payout is warranted.
Harrington, who is in charge of overseeing the case, filed a supporting statement on October 27th; the Trustee argued that:
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 has clarified that the objection does not suggest that Celsius employees are not entitled to a key employee retention program (KERP) but rather that the data presented by Celsius is inadequate to support the high price tag. KERPs are incentives for employees to help propel the restructuring process.
As such, the Trustee demands that Celsius prove that the incentives are fair in light of the facts about the case before it’s approved. The Trustee claims Celsius has failed to do so since no demonstrable metrics were present with the filings.
Unlike the publicly available data regarding Celsius creditors, information regarding the KERP beneficiaries has been kept confidential. An unredacted analysis has been disclosed only to the court, the Official Committee of Unsecured Creditors, and the Trustee.
The Trustee has also voiced opposition to this, arguing that third parties cannot challenge the KERP participants’ eligibility on the grounds that they are insiders.
As of now, the Bonus motion is set to go to court on November 1.
Among the many developments earlier this month, court filings revealed that the top three Celsius executives took $56.12 million in crypto between May and June 2022 before the business stopped processing withdrawals and filed for bankruptcy.
Later, it was also reported that US Bankruptcy Court Judge Martin Glenn was referring to UK’s “Digital Assets Consultation Paper” since there are no legal precedents similar to the Celsius case in the Southern District of New York.
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