The Trustee has opposed to the retention bonus, claiming that there is insufficient evidence in the motion to support such a significant payment and that it is unclear whether individuals could be regarded as insiders.
William Harrington, the U.S. Trustee in charge of the Celsius chapter 11 bankruptcy case, has opposed to a move by the company that would have given 62 of its 275 workers a retention incentive worth $2.96 million.
In its supporting statement for the objection submitted on October 27, the Trustee slammed Celsius, stating:
“It defies logic, not to mention the Bankruptcy Code, that a corporation where the bulk of its activities are no longer delivering services, would suddenly propose a multi-million dollar incentive scheme.”
The Trustee asserts that Celsius must demonstrate that the incentives are fair in light of the case’s circumstances in order for the “bonus motion,” as it is appropriately dubbed, to be approved. The Trustee asserts that Celsius has failed to do so in the absence of any quantifiable indicators.
Although the issue does not imply that Celsius workers do not deserve a KERP, it does point out that the evidence Celsius supplied was inadequate to support such a large sum.
The purpose of KERPs is to inspire workers to support a successful restructuring result. Even while increasing CEO compensation before a possible reorganisation may appear illogical, it often serves the interests of all stakeholders.
The specifics of the KERP beneficiaries 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 seen 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 on 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 (BTC) 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 an average of $53,000 per day.
