The embattled crypto lending firm Celsius Network might see another blow, this time due to the bankruptcy law. It could take place given the recent request from the Celsius crypto lending platform within the bankruptcy court to the judge about approving a vital employee retention plan. In the filing, the lawyer asked for more cash for the company to pay employees so they would not quit.
Celsius network could be stuck with a different issue here given the bankruptcy law which states conditions to get some money back. The company would have to pay bonuses first to those who have been putting the company in such a situation where it became unable to pay back its debts.
This came as another hit for the company already dealing with the issue of brain drain. In their filing, the company lawyer said that an extra payment of up to 3 million USD would be reimbursed among the 62 employees. These employees were said to be with the company when it was dealing with the odd times.
In addition to this, the company has also disclosed about the resignation issue. Celsius mentioned in their filing that over 100 employees left from the crypto firm by now following the bankruptcy filing.
Lawyers said that the crypto firm had approximately 370 employees working in the company when it filed for bankruptcy. Since then more than one-fourth of staff have already left. They cited the offerings of better pay from the competitors as another reason.
The lawyers argued that the aforementioned situation makes it crucial for debtors asking for money so that they can have the potential to offer their employees a justified compensation. Or else the company went on to face their fate of brain drain amidst an industry with highly technical and strong competitiveness.
Time-tested Method of Getting Funds Release
Given such situations going on within the bankruptcy case, many argue this as the common plan of beleaguered companies in the United States to go with. Such arguments and reasonings seem unpleasant yet there are high chances of bankruptcy judges to approve the demands.
Following the good old time tested argument seeking the approval the lawyers say that a company is in need of retaining its highly skilled employees in order to get their world done and help the company sustain for long. The employees would help in making things better and preventing crypto companies from falling down completely.
The lawyers also add that hiring new employees acts as an expensive way since finding and training them costs relatively more money as well as it takes time. These circumstances make it hard for creditors to lead the lower chances of recoveries.
Source: https://www.thecoinrepublic.com/2022/10/14/crypto-firm-celsius-dealing-cash-crunch-filed-for-retention-plan/