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Voyager urges US Bankruptcy Court to approve $1.9 million of its funds for KERP

Voyager is now engaging in bankruptcy proceedings in the U.S. Bankruptcy Court of the Southern District of New York and has urged a federal judge to allow $1.9 million of its money for a “Key Employee Retention Plan” (KERP), which comprises bonuses to 38 employees on August 19. Steven Ehrlich, CEO of Voyager, requested permission from the court to have the names, titles, wages, identities of the 38 employees’ supervisors, and proposed incentives redacted because they are “non-public, personal, and/or sensitive information.”

A group of Voyager clients claim the Official Committee of Unsecured Creditors complained on August 19 that the company’s employees are “already well-compensated” and that little has been done to cut costs. The filing stated:

“The KERP allows the Debtors to retain certain critical non-insider employees and is consistent with retention programmes in similar chapter 11 cases. The KERP provides for the payment of cash retention awards to 38 of the debtors’ non-insider employees. “

The value of the “huge equity component” that normally makes up an employee’s overall compensation “has cratered,” which means that employees are now being paid less than what they are worth. According to the Trustee’s petition, “one or more of the KERP participants may well be categorized as an insider based on the United States Trustee’s analysis of the unredacted evidence.”

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