Bankrupt Voyager secures 484.35 million Dollars to repay creditors

Crypto News– Voyager Digital has achieved significant progress in compensating creditors following its bankruptcy proceedings, securing $484.35 million through settlements with FTX, Three Arrows Capital (3AC), and claims against Directors and Officers (D&O) insurance.

Bankrupt Voyager secures 484.35 million Dollars to repay creditors

This milestone marks a substantial step forward in the company’s financial recovery and efforts to reimburse creditors.

A detailed report on asset recovery and creditor distribution, submitted to the United States Bankruptcy Court for the Southern District of New York, revealed that the majority of the reclaimed funds, approximately $450 million, resulted from the settlement with FTX.

Voyager filed for Chapter 11 bankruptcy in July 2022 amidst a downturn in the crypto market.

In October 2023, the United States Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC) filed parallel lawsuits against former Voyager CEO Stephen Ehrlich for making fraudulent statements.

Bankrupt Voyager secures 484.35 million Dollars for repayment to creditors despite insolvency

This settlement, including interest, covers roughly 25% of Voyager’s creditors‘ total claims and is expected to be distributed soon.

Alongside the FTX agreement, Voyager has secured a claim of approximately $675 million from the ongoing litigation with Three Arrows Capital. Out of this sum, $20.43 million represents Voyager’s share of the initial distribution from Three Arrows Capital.

The administrator anticipates additional payments to be made in the coming years as assets are liquidated and further litigation settlements are finalized. Moreover, a settlement reached through D&O insurance mediation will allocate at least $14.35 million to benefit Voyager’s creditors.

As Voyager advances in its journey of financial recovery, it encounters operational challenges, notably a substantial number of uncashed checks. Currently, approximately 270,000 checks, amounting to $17 million, remain uncashed, with the majority valued at less than $25.

To address this issue, Voyager has set a deadline of April 20 for claiming these uncashed checks. After this date, any uncashed checks will be rendered void.

Furthermore, Voyager continues to grapple with the aftermath of a data breach. An ongoing investigation, supported by external experts, is underway to ascertain the source and full ramifications of the breach, which led to the compromise of creditor data.

As of May 2023, a restructuring plan proposed that Voyager customers would initially recover 35.7% of their claims in cryptocurrency or cash. Additionally, the crypto exchange reached a settlement with the FTC for $1.65 billion in monetary relief in November 2023.