The legal team of Voyager Digital has expressed its shock at the FTX bankruptcy filing and they are also dismayed because it means that the crypto exchange will not be taking over its distressed assets.
Thus, they have to start the bidding process once more, as announced last week by the committee formed by unsecured creditors of Voyager Digital.
The committee issued a press release to clarify that none of the assets had been transferred to FTX US, but disclosed that an escrow account had a $5 million deposit made by the now-bankrupt exchange in ‘good faith’.
Delays
On Tuesday, there was a bankruptcy hearing of Voyager Digital during which Joshua Sussberg said that it was obvious that they would no longer have a transaction with FTX.
Had FTX not gone bankrupt, the creditors of Voyager Digital had a deadline of November 29th to accept or reject a restructuring plan.
A hearing had also been scheduled for confirming the plan on December 8th. But, attorney Joshua Sussberg stated that the hearing is now canceled.
He added that other deadlines for objection and voting that the court had approved as per the order of the disclosure statement were no longer in effect because of the FTX situation.
The disclosure statement
Creditors use the disclosure statement to understand the state of affairs of the debtor because it helps them decide if a restructuring plan should be approved or not.
The disclosure statement for Voyager Digital would have included the purchase of $1.4 billion worth of assets of the company by FTX US.
But, with FTX going bankrupt, this is no longer applicable, so they would have to start the process once more. It appears that the asset manager is now going over offers from bidders who previously lost.
Those familiar with the matter said that CrossTower and Wave Financial had shown an interest in taking over the distressed assets, but none had confirmed.
Voyager’s situation
Asset manager Voyager Digital had gone bankrupt in July and it has over 100,000 creditors. It had disclosed in June that it had been exposed to bankrupt Three Arrows Capital (3AC).
The latter had also filed for bankruptcy on July 2nd and Voyager’s exposure to it had been around $661 million.
Voyager’s debts are between $1 and $10 billion. It had turned down FTX’s offer in September, stating that it was a ‘low-ball bid’, but it later accepted a bid worth $1.4 billion for its distressed assets.
However, FTX is no longer capable of completing the deal, given that West Realm Shires, its parent company that won the Voyager auction, has also filed for bankruptcy.
The FTX crypto empire came to a rather spectacular end last week when its FTT token’s price plunged after reports showed that a significant amount of Alameda Research’s balance sheet comprised the token.
Binance also announced it was selling its FTT reserves, which pushed up withdrawals on FTX that eventually resulted in a liquidity crisis ending in the company’s bankruptcy.