- Voyager Digital has won the bankruptcy court’s approval to start repaying its creditors and customers.
- The bankrupt crypto lender’s customers will only be able to recover 35% of the amount they’re owed.
- The repayment to customers may go up depending on the outcome of third-party claim disputes.
The U.S. Bankruptcy Court for the Southern District of New York has approved Voyager Digital’s Chapter 11 plan to wind down its operations and distribute its remaining assets to customers. The latest development comes as much-needed good news for the crypto lender’s customers who have been stranded since the firm filed for Chapter 11 bankruptcy in July last year.
Additional Repayment To Customers Contingent On Voyager’s Outstanding Claim Disputes
According to a report by Bloomberg, Manhattan bankruptcy Judge Michael Wiles approved Voyager’s Chapter 11 procedures which laid out its plans to execute liquidation and repayment to creditors. The procedures, which were filed earlier this month, informed the court how the bankrupt crypto lender planned to manage its remaining assets worth over $1.3 billion. The amount represents about 76% of the aggregate value of customer claims against Voyager’s bankruptcy estate. Voyager’s customers are owed over $1.7 billion as per bankruptcy filings.
However, the customers will only receive 35.72% of their claim amount. According to the bankrupt crypto lender, the remaining amount will be held back until all outstanding claims disputes with third parties are settled. As per the initial creditor recovery calculation, $445 million will be held back on account of the preference claims associated with the bankrupt crypto exchange FTX and its sister firm Alameda Research. Voyager plans to retain another $135.6 million for its litigation reserve and to pay for the wind-down costs. An additional $49.9 million will be held back for administrative and priority tax claims. Adding another $74.1 million related to miscellaneous holdbacks, the subtotal of holdbacks comes to $704.6 million.
Voyager has stated that the customers may receive more than 35% of their claim amount, depending on the outcome of preference claim disputes related to FTX and Alameda Research. The customers may see additional repayment given that the Voyager bankruptcy estate is also a creditor in the Three Arrows Capital liquidation. All subsequent recoveries will be made in either cash or crypto at the Plan Administrator’s discretion.