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U.S. bankruptcy court approves Voyager’s chapter 11 plan, details inside

2min Read

Voyager Digital’s customers will receive just 35% of their original claim amount since the bankruptcy estate will be holding back over $700 million.

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  • Voyager Digital received the approval from the bankruptcy court to start liquidation procedures.
  • The crypto lender’s bankruptcy estate aims to make initial asset distributions no later than 1 June, 2023.

Voyager Digital has received the green light from a U.S. bankruptcy court to wind down its operations and return its remaining assets to customers.

The approval comes after the bankrupt crypto lender filed its Chapter 11 plan in court earlier this month. 

Voyager to make initial distributions soon

Voyager Digital took to Twitter on 18 May to inform its customers that bankruptcy judge Michael Wiles approved its liquidation procedures.

This paved the way for distributing the assets to customers who were stranded ever since the crypto lender filed for bankruptcy last year.

Judge Wiles acknowledged the customers’ dissatisfaction with his overseeing of Voyager’s Chapter 11 proceedings.

He clarified that liquidation was the best course of action for the crypto lender, given that it didn’t have enough assets to fully repay the customers. 

According to the roadmap shared by Voyager, the Chapter 11 plan may go into effect as soon as 19 May.

Once the plan becomes effective, the Voyager Official Committee of Unsecured Creditors will be dissolved and the Plan Administrator will take control of the Wind Down Debtor.

The bankruptcy estate is currently working out the repayment details and plans to make the initial distributions before 1 June. As for the repayment, the bankrupt crypto lender will only be returning 35% of the customers’ claim amount.

The remaining will be held back until claims disputes with third parties are resolved. 

As per the liquidation procedures filed earlier this month, Voyager’s bankruptcy estate currently has a little over $1.3 billion in assets, which represent 75% of the amount owed to customers.

Of this, $445 million will be held back for preference claims related to FTX and Alameda Research. And $135 million will be held back for wind down costs and the form’s litigation reserve.

Another $49 million will be retained for administrative claims, leaving $629 million for the crypto lender’s customers.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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