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Voyager Digital creditor requests trustee to seize control of the estate



Voyager Digital creditor requests trustee to seize control of the estate
Source: Pexels

  • A Voyager creditor has requested a chapter 11 trustee to partake in the bankruptcy trial of Voyager Digital.
  • Previously, Voyager and its creditors resisted Alameda Research’s attempts to recoup $446 million in loan repayments.

A Voyager creditor and finance lawyer has requested the involvement of a chapter 11 trustee in the bankruptcy trial of crypto brokerage Voyager Digital. This could result in Voyager losing control of its estate.

In a motion issued on 1 February, Voyager creditor Michelle DiVita accused Voyager of a history of financial statement inaccuracies and public misrepresentations that were known, or reasonably discoverable, at the start of the bankruptcy.

DiVita believed that an examiner or trustee should have been requested because of this pre-bankruptcy behavior. Inasmuch, she was requesting one herself.

Voyager has been accused of concealing the true nature of its lending activities by publishing financial reports that materially understated its loan positions by over $1 billion USD.

Shigo Lavine, a former Voyager director, highlighted some of the key allegations in the filing on Twitter on 1 February. Voyager allegedly underreported a $609 million loan to crypto hedge fund Three Arrows Capital. Moreover, it undervalued Bitcoin [BTC] in its financial reports by 546% to downplay the size of its loans.

Coinbase aware of Voyager Digital’s misgivings

Crypto exchange Coinbase also became aware of Voyager’s financial reporting inconsistencies. It reportedly backed out of a potential deal to acquire Voyager’s assets after discovering the financials don’t add up.

Notably, the U.S. Trustee appoints a creditors committee and evaluates applications for professional re-compensation. Additionally, they may also recruit a bankruptcy trustee to oversee the debtor’s affairs if the debtors do not do so themselves.

Recently, Voyager and its creditors resisted an attempt by bankrupt trading firm Alameda Research to recoup $446 million in loan repayments. Alameda had sought to recover the funds in a 30 January court filing. Allegedly, they repaid the loans within 90 days of filing for chapter 11 bankruptcy. Thus, they sought to recoup these funds for the benefit of Alameda creditors.

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Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot's writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S - There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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