The affected customers could now expect to receive 35.72% of their claims, to begin with
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The bankruptcy plan of the crypto brokerage Voyager was approved by the United States Bankruptcy Court for the Southern District of New York on May 17. The procedure approval by Judge Michael Wiles’ order was published by the court a day earlier.
US cryptocurrency broker and lender Voyager Digital filed for bankruptcy protection due to “volatility and contagion” in the market in July 2022. The company became the victim of a chain reaction affecting the whole crypto industry. It was mainly affected by the liquidation of a crypto-focused hedge fund, Three Arrows Capital, which defaulted on an almost $700 million loan to Voyager.
The approved version was the third drafted bankruptcy plan proposed on May 5 after Binance.US reversed its course and abandoned the deal to buy $1 billion worth of Voyager assets. According to the latest plan, Voyager will now liquidate and distribute its assets to creditors.
Before the Binance.US deal occurred, the now-bankrupt FTX US had won an auction for Voyager’s assets. Naturally, that sale was not an option when FTX collapsed. However, the proposed FTX sale would reportedly have allowed creditors to receive 72% of the value of their accounts, almost twice more than the current deal.
FTX sued Voyager this January, claiming loan repayments it made in 2022 are liable to clawback because they occurred prior to FTX’s bankruptcy.
In its original bankruptcy filing, Voyager estimated that it had more than 100,000 creditors, somewhere between $1bn and $10bn in assets and liabilities worth the same value. The company’s largest single creditor, with unsecured loans of $75m, was an FTX-related cryptocurrency trader Alameda Research.
Per the latest information, Voyager had $1.33 billion of assets for recovery as of May 8, of which $629.8 million was available for initial recovery, on claims of $1.8 billion. Therefore, its customers could now expect to resume account access and receive 35.72% of their claims initially, either in crypto through the Voyager app or in cash.
The funds would come from proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens.
In addition, creditors’ initial recovery sum could increase if FTX/Alameda Research’s claim for preferential recovery is unsuccessful.
