Voyager bankruptcy plan approved, customers may recover 35.7% of claims initially

The third try is a charm for the crypto brokerage, whose assets were almost bought by FTX and Binance.US. Now it’s just handing what it has over to its creditors.

Crypto brokerage Voyager’s bankruptcy plan was approved by the United States Bankruptcy Court for the Southern District of New York on May 17, according to a Reuters report. Judge Michael Wiles’ order approving the procedure was published by the court a day earlier.

The so-called third bankruptcy plan was proposed on May 5 after Binance.US backed out of plans to buy $1 billion worth of Voyager assets on April 25. That deal had overcome resistance from the U.S. government before Binance.US’ last-minute reversal. Voyager will now liquidate — that is, distribute its assets to its creditors.

Why are lawyers & executives for #Voyager not forfeiting their pay if they didn’t do their jobs, especially when many are working other #crypto bankruptcy cases?

In what other industry can you fail at literally everything & still come out with millions?

Make it make sense. https://t.co/BQEu0J9h9H

— VGX Heroes (@VGX_Heroes) May 15, 2023

In September, before the Binance.US deal, FTX US had won an auction for Voyager’s assets, bidding $1.4 billion, but that sale fell through when FTX collapsed. The FTX sale would reportedly have allowed creditors to receive 72% of the value of their accounts. FTX sued Voyager for $445.8 million in January, claiming loan repayments it made in 2022 are liable to clawback because they occurred immediately prior to FTX’s bankruptcy.

Voyager said on its website that customers could now expect to receive 35.72% of their claims initially, either in crypto through the Voyager app or in cash after 30 days. According to Voyager, it 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.

Customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens.

— Stephen Ehrlich (@Ehrls15) July 6, 2022

The size of the creditors’ initial recovery could increase if FTX/Alameda Research’s claim for preferential recovery is unsuccessful. Voyager is holding back $445 million to cover that claim. In addition, Voyager may still recover funds from bankrupt Three Arrows Capital. Voyager issued a notice of default to Three Arrows on a loan of 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) in late June. Those assets were worth $655 million then and approximately $768 million at the time of writing.

Voyager filed for bankruptcy on July 5.

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