Based on a statement by Megan Crowell, losing certain staff could “severely [limit] the debtors’ options” amid bankruptcy proceedings. The chief people officer at BlockFi crypto lending firm has petitioned a court to support bonuses for ‘key employees’ amid Chapter 11 bankruptcy proceedings.
In a January 23 declaration for the United State Bankruptcy Court in the District of New Jersey, Crowell stated that without giving certain financial incentives, BlockFi may fail to retain employees in a “highly competitive” crypto industry. Based on the BlockFi executive, most staff members were “highly likely to leave the company” amid the Chapter 11 bankruptcy process without any “competitive compensation”, possibly adding to costs in the long term.
“The war for talent remains active, and the Participants have many opportunities inside and outside the cryptocurrency sector,” said Crowell. “Individuals with cryptocurrency experience are attractive to employers in the finance, technology, and payment platform industries broadly, among others, especially as these industries adapt their products and services to incorporate cryptocurrency and or related technologies.”
“In the event additional Participants resign, I believe that the Debtors would struggle to adequately source candidates who could operate the BlockFi platform effectively, severely limiting the Debtors’ options in these chapter 11 cases. Moreover, hiring new employees would require the Debtors to incur significant operational and financial costs.”
BlockFi filed for bankruptcy on November 28, stating at the time that the company had around $257 million on hand and filed a motion to “establish a Key Employee Retention Plan to ensure the company retains trained internal resources for business-critical functions” as the operations never qualified for severance. Based on Crowell, the proposed plan would offer employees bonuses of 20-50% of their salaries if they remain at the company as of January 31.Buy Bitcoin Now
Crowell said that certain ‘critical’ employees had already accepted offers at Block, Google, and Walmart after the bankruptcy filing in November, in some cases for compensation significantly above their current compensation”. Her LinkedIn indicated that she joined BlockFi in July 2019, working in different roles related to recruiting talent.
Most crypto companies including Genesis, FTX, Voyager Digital, and Celsius Network filed for Chapter 11 bankruptcy in the past year, with most users reporting losses reaching up to millions of dollars.