Key takeaways:
- Under a provisional agreement reached with FTX, former customers of Voyager Digital may be able to recover up to 72% of their accounts.
- US Judge Michael E. Wiles emphasised that the new agreement requires both his official approval and the “go-ahead” of Voyager’s creditors.
Customers of the bankrupt cryptocurrency lender Voyager Digital may be entitled to receive 72% of the value of their accounts as part of a tentative agreement with FTX US, according to court documents.
The agreement cannot be finalised, however, until U.S. Bankruptcy Judge Michael E. Wiles approves Voyager’s bankruptcy payout plan. This decision is anticipated to be made in December.
Additionally, there is a provision known as a “fiduciary out” that enables Voyager to terminate the agreement with FTX should any proposals be made that result in a better outcome for creditors.
Christine Okike, the bankruptcy lawyer for Voyager, argued in response that FTX has presented “the only viable alternative” for the business. Voyager did agree to modify the “fiduciary clause” though, allowing for the possibility of a higher offer.
In order to ensure creditors get the best deal possible, the clause is frequently included in bankruptcy cases and allows businesses to consider higher offers until the sale has been concluded.
Having followed a “highly competitive,” two-week long auction process, the cryptocurrency platform FTX emerged victorious in acquiring Voyager’s assets last month. In essence, cryptocurrency broker Voyager Digital Holdings officially filed for bankruptcy in July of last year under the heading of Chapter 11, the part of US bankruptcy law that permits businesses to restructure their debt in the event of extreme financial hardship.
In essence, cryptocurrency broker Voyager Digital Holdings officially filed for bankruptcy in July of last year under the heading of Chapter 11, the part of US bankruptcy law that permits businesses to restructure their debt in the event of extreme financial hardship.
The preliminary plan from FTX would allow for the full payment of all primary concern claims and the recovery of roughly 72% of the value of all other account holders’ accounts, which have been frozen since July 1.
According to an FTX.US spokesperson, “We’re eager to receive approval from the bankruptcy court so we can start working closely with the Voyager team to ensure that funds are made available to customers as quickly as is legally possible.”
The amount excludes any money it might be able to recover as part of its lawsuit against Three Arrows Capital (3AC), a cryptocurrency hedge fund that had stopped making loan payments to Voyager.
Voyager account holders will be able to reclaim a larger portion of their frozen accounts with the help of any additional funds that are obtained as a piece of this claim.
