The United States Bankruptcy Court for the Southern District of New York has given the green light to crypto brokerage Voyager’s bankruptcy plan, as reported by Reuters. Judge Michael Wiles’ order endorsing the procedure was published a day prior to the report.
This marks the third bankruptcy plan proposed by Voyager after failed attempts by FTX and Binance.US to acquire its assets. The latest plan involves the liquidation of Voyager, wherein its assets will be distributed among its creditors.
In September, FTX US had successfully bid $1.4 billion for Voyager’s assets in an auction, but the sale fell through due to FTX’s own financial setback. Had the FTX sale gone through, creditors were anticipated to receive 72% of their account value. In January, FTX filed a lawsuit against Voyager for $445.8 million, claiming that loan repayments made by Voyager prior to FTX’s bankruptcy were subject to clawback.
According to Voyager’s website, customers can now expect an initial recovery of 35.72% of their claims, which will be delivered either in cryptocurrency through the Voyager app or as cash after a 30-day period. As of May 8, Voyager had $1.33 billion in recoverable assets, with $629.8 million available for initial recovery, against total claims amounting to $1.8 billion.
The extent of creditors’ initial recovery may increase if FTX/Alameda Research’s claim for preferential recovery is unsuccessful. Voyager has set aside $445 million to cover that claim. Additionally, Voyager may still obtain funds from Three Arrows Capital, which defaulted on a loan of 15,250 Bitcoin and 350 million USD Coin in late June. The value of these assets was approximately $655 million at the time of default and around $768 million at present.
Voyager filed for bankruptcy on July 5, initiating a series of attempts to secure a viable resolution for its creditors.
