key takeaways
- Voyager Digital has launched voluntary Chapter 11 bankruptcy proceedings in the Southern District of New York.
- The company said in a press release that it is proposing a restructuring plan to cater to its creditors and customers.
- Voyager had a significant exposure to Three Arrows Capital, which has also started bankruptcy proceedings.
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Voyager Digital has filed for Chapter 11 bankruptcy and has begun the process of restructuring the company to meet its obligations to creditors and customers. The company released this news in a press release late Tuesday.
Bon Voyage
Voyager Digital announced in a press release late Tuesday that it has begun voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York. According to the press release, Voyager’s move aims to “maximize value for all stakeholders.”
Stephen Ehrlich saidChief Executive Officer:
“This comprehensive restructuring is the best way to protect assets on the platform and maximize value for all stakeholders, including customers… Voyager’s platform provides investors with access to trading crypto assets with simplicity, speed, liquidity and transparency. While I strongly believe in this future, the prolonged volatility and transition in the crypto markets over the past few months, and on loan from Voyager Digital, LLC, a subsidiary of the company, Three Arrows Capital (” 3AC”) now to take deliberate and decisive action. The Chapter 11 procedure provides an efficient and equitable mechanism for maximum recovery.”
Voyager claims to have over $110 million in cash and crypto assets on hand to support operations during the Chapter 11 process. It has more than $350 million in cash in a customer benefit (FBO) account at Metropolitan Commercial Bank, approximately $1.3 billion in crypto assets on its platform, and more than $650 million in claims from the now-defunct Three Arrows Capital (3AC). ) The company said it is “actively pursuing all available measures” to recover its money from 3AC, including court proceedings.
A Chapter 11 bankruptcy provides a mechanism for a company to continue operating while significantly restructuring its obligations. This restructuring must be in the best interest of the creditors of the company.
The proposed restructuring plan aims to restore account access for customers. Under the plan, customers whose accounts hold crypto will receive some combination of their holdings in crypto, proceeds from the 3AC recovery, common stock in the newly reorganized company, and Voyager tokens.
Customers who have USD in their account will have access to those funds as an “after” [a] The process of reconciliation and fraud prevention with Metropolitan Commercial Bank has been completed.
Trading, deposits, withdrawals and rewards on the Platform remain suspended.
Disclosure: At the time of writing, the author of this article holds BTC and several other cryptocurrencies.
