The US Trustee states that Celsius' decision to provide bonuses to key employees is not logical.
The United States Trustee in charge of Celsius Chapter 11 bankruptcy case, William Harrington, has objected to Celsius' motion to implement a key employee retention plan (KERP).
According to court documents, the company sought to reward 62 out of its 275 employees with a total bonus of $2.96 million.
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In its objection statement, the US Trustee William Harrington emphasized:
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 highlighted that Celsius failed to deliver factual information, proving that bonuses were reasonably distributed. One of the main issues identified by the US Trustee was that there is no way to determine whether the employees eligible for these bonuses are insiders or not.
Moreover, in his statement, the US Trustee claimed that KERP bonuses have no connection to identifiable metrics enabling the bankruptcy committee to ascertain the impact such action may have on the restructuring process.
As a result, the US Trustee is asking the bankruptcy court to reject Celsius’ motion until the company provides more relevant information. The decision regarding this matter will be made on November 1st.
Celsius filed for Chapter 11 bankruptcy on July 13th in the United States Bankruptcy Court for the Southern District of New York.
It is not the first time that Celsius' proposal has been objected. At the end of September, The Department of Justice (DOJ) objected to Celsius' motion to reopen withdrawals and sell its stablecoins, claiming that these plans are “premature.”
