Judge Michael Kaplan of the New Jersey bankruptcy court has approved BlockFi’s $10 million salary and bonus package for employees.
After the crypto lender requested financial assistance from the cryptocurrency exchange FTX in June 2022, court documents revealed that the company’s executives were awarded pay raises of up to $275,000 each.
BlockFi, which relied on FTX for a $400 million line of credit, filed for Chapter 11 bankruptcy protection in November, shortly after FTX did the same.
About 130 employees will be eligible for the new bonus programme, which provides a total of 42.5% of base pay distributed in three equal payments over the course of a year.
BlockFi’s attorneys argued that this bundle, valued at $9.98 million, was the fair and reasonable way to compensate departed clients.
Rush Howell of the law firm Kirkland & Ellis told the court, “It’s essential that the debtors institute these retention programmes to keep critical workers with the company.”
Howell noted that about 10% of staff had left since BlockFi filed for bankruptcy on November 28. The debtors’ success depends on these retention programmes, which “maximise recoveries to stakeholders.”
After the U.S. Trustee, a division of the Department of Justice, withdrew its objections to the plan due to a lack of details, Judge Michael Kaplan said he was “happy to approve” the plan.
Company “insiders,” a legal term including directors, officers, and their families, will not be eligible for the package, according to court filings.