tl;dr
Voyager Digital has recovered $484.35 million from settlements with FTX, Three Arrows Capital (3AC), and Directors and Officers (D&O) insurance, with approximately $450 million coming from the FTX settlement. This marks a significant step in the company's efforts to allocate assets to creditors foll...
Voyager Digital has recovered $484.35 million from settlements with FTX, Three Arrows Capital (3AC), and Directors and Officers (D&O) insurance, with approximately $450 million coming from the FTX settlement. This marks a significant step in the company's efforts to allocate assets to creditors following its financial decline. Voyager also revealed a $675 million claim from ongoing litigation with 3AC and a breakthrough in D&O insurance mediation, which will benefit its creditors with at least $14.35 million. However, operational challenges persist, including dealing with uncashed checks totaling $17 million and addressing the aftermath of an FTX data breach that compromised creditor information.
According to an April 9 filing, approximately $450 million of the reclaimed funds came from a settlement with FTX. This agreement, inclusive of interest, accounts for roughly 25% of Voyager’s creditors’ original claims. The company plans to distribute this amount in an upcoming round, providing much-needed relief to its creditors. The FTX debtors have agreed to forfeit their rights to the $5 million deposit held in escrow from Voyager’s bankruptcy sale process, with these funds being released to the Wind-Down Debtor’s estate. Additionally, the FTX debtors and the Wind-Down Debtor waive and release all claims against each other, including any previously submitted proofs of claim. This agreement includes dismissing the pending FTX case.
Voyager also revealed that it has obtained a claim of approximately $675 million from its ongoing litigation with Three Arrows Capital (3AC). Out of this amount, $20.43 million represents Voyager’s proportionate share of the initial distribution from 3AC. The plan administrator anticipates further payments as it progresses through its court proceedings and sells off assets. In addition to these settlements, Voyager announced a breakthrough through D&O insurance mediation, which will allocate at least $14.35 million to benefit its creditors, further helping its recovery efforts.
However, amidst these positive developments, Voyager faces operational challenges, including dealing with uncashed checks. Around 270,000 checks totaling $17 million remain uncashed, with the majority, approximately 187,000, for amounts less than $25. To address this issue, Voyager has set an April 20, 2024, deadline, after which all outstanding checks will be considered unclaimed and canceled. Voyager also deals with the aftermath of an FTX data breach, adding complexity to its bankruptcy proceedings. An ongoing investigation is underway to identify the origin and consequences of the breach, which compromised creditor information.
Voyager initiated Chapter 11 bankruptcy proceedings in July 2022 due to serious events in the crypto market, such as the collapse of the Terra ecosystem in May. By May 2023, a restructuring plan proposed that Voyager customers could recoup 35.7% of their claims in either cryptocurrency or cash. In November 2023, the crypto exchange settled with the FTC, agreeing to provide $1.65 billion in monetary relief.
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