- Voyager filed its bankruptcy at the beginning of the second quarter of 2022.
- FTX won the auction for Voyager digital and purchased it for $1.4 billion.
Since the last few months, the crypto market has struggled to revive and acquire its original position as it was trading in the H1 of 2021.
The image of the crypto fintech sector has changed in the last few months; many new crypto platforms were introduced, several leading market players collapsed, and many were even closed/bankrupt.
At the beginning second quarter of 2022, globally popular crypto lender Celsius Network filed its bankruptcy under chapter 11 of the bankruptcy rule. The bankruptcy filing occurred in the southern district court of New York.
Among the list of bankrupt institutions, Voyager Digital is also listed. The firm is preparing a roadmap to sell its assets to FTX US, a crypto exchange headed by Sam Bankman-Fried, for around $ 1.4 billion. Still, a big catch emerged on Wednesday — Voyager administrators have included broad legal exemptions for themselves in the offered sale contract.
According to the filling from a future lawsuit, In a partially amended objection to Voyager’s proposed sale agreement, Voyager’s unsecured creditors’ committee (UCC) pushed back against a provision for a “wide release” that would shield the crypto lender’s directors and officers individuals “primarily debtors,” are responsible for the financial crisis.
In its recent form, the sale agreement depends on the provision of legal immunity.
UCC lawyer defines it as a “Hobson’s choice” for Voyager’s creditors: either to support the sale agreement and allow Voyager executives to exit scot-free or to fight the plan. Get an opportunity to get your money back, Risking the bankruptcy process to “turn into a litigation quagmire, to the sole loss of unsecured creditors whose assets are long frozen.”
According to the 12 October 2022 filing, the UCC investigated the conduct of Voyager executives to determine the legal immunity that may protect them and called its findings “sobering.”
Elaboration of UCC findings is presently unavailable, but the lawyers contended that tries to safeguard the executive from legal proceedings were “particularly egregious” due to the potential for “colorable and valuable causes of action against these directors and officers.”
The objection filed by UCC requests the court supervising Voyager’s bankruptcy proceedings to deny the provision for legal immunity but proceed with the sale agreement.
Before the bankruptcy procedure, Voyager was among the top crypto lending leaders. At the beginning of the second quarter of 2022, Voyager crypto lender sanctioned a massive loan to Alameda Research of Sam-Bankman Fried.
On 2nd October 2022, TheCoinRepublic reported that FTX won the auction to acquire Voyager with a bid of $1.42 billion. Still, the digital asset exchange will only receive $51 million in cash for the crypto lending platform’s assets, intellectual property, and user base.
In a bidding war for the bankrupt cryptocurrency company, FTX, led by billionaire CEO Sam Bankman-Fried, beat out Binance, the world’s largest crypto exchange platform by volume.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2022/10/15/voyager-digitals-creditors-oppose-against-proposal-to-provide-executioners-with-legal-immunity/