Voyager’s bankruptcy plan has been approved, customers can initially recover 35.7% of receivables

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 authorizing the proceedings was published by the court a day earlier.

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

Why are lawyers and executives in favour #Voyager not forfeit their wages if they did not do their job, especially when many work otherwise #crypto bankruptcy cases?

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

Make it logical.

— 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 for $1.4 billion, but that sale fell through as FTX collapsed. Through the FTX sale, creditors reportedly received 72% of the value of their accounts. FTX sued Voyager in January for $445.8 million, claiming loan repayments it made in 2022 are recoverable because they occurred just prior to FTX’s bankruptcy.

Related: US officials appeal for protection for Voyager execs in Binance.US sale

Voyager said on its website that customers can now expect to receive 35.72% of their claims initially, either in crypto through the Voyager app or in cash after 30 days. As of May 8, it had $1.33 billion in assets for recovery, of which $629.8 million was available for initial recovery, on claims of $1.8 billion, according to Voyager.

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 stock in the newly reorganized company, and Voyager tokens.

— Stephen Ehrlich (@Ehrls15) July 6, 2022

The size of the creditors’ initial recovery could increase if the FTX/Alameda Research claim for preferential recovery is denied. Voyager is withholding $445 million to cover that claim. In addition, Voyager may still be able to recover money from the bankrupt Three Arrows Capital. Voyager defaulted on Three Arrows in late June for a loan of 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC). Those assets were worth $655 million at the time and about $768 million at the time of writing.

Voyager filed for bankruptcy on July 5.

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