Background Overview of Voyager Digital
Voyager Digital, a notable player in the crypto trading arena, officially filed for Chapter 11 bankruptcy on July 5. Unsurprisingly, this announcement sent shockwaves through the industry. The brokerage soon found itself entangled in a financial quagmire, owing about $1B to its customers. If only getting a refund was as easy as returning a defective toaster.
The Binance.US Proposal
Fast forward to December 19, where the beleaguered Voyager announced that it had given the green light to a proposal from Binance.US. This deal aimed to buy Voyager’s debt, promising creditors recovery rates that jumped higher than a cat on a hot tin roof. It was positioned as the lifesaver that an ailing company desperately needed.
Objections: A Legal Tug-of-War
However, not everyone was clinking champagne glasses in celebration. Various parties, including the Securities and Exchange Commission, four states, and Alameda Research, filed objections to the plan. In a surprising move, Voyager responded to these objections on January 8, asserting that the arguments lacked any tangible proof or legal foundations. As if they had rolled their eyes in the court documents, they said:
“The Objections ignore the practical realities of these chapter 11 cases.”
Identifying the Precarious Nature of the Objections
Voyager described the objections as not just inappropriate but downright “premature.” Now, that’s quite a term to throw around when lives and finances hang in the balance. They argued that, while the objections were hurling accusations, they failed to propose a better option.
The Legal Doctrine at Play
Voyager leaned on the so-called “business judgment rule,” a legal doctrine that typically compels courts to respect decisions made by company executives. This defense soundly pointed out that they made a calculated business decision aimed at protecting the interests of their creditors. They even highlighted their ‘fiduciary out,’ suggesting they could still entertain better offers that might come their way. Because let’s face it, who doesn’t want the option to switch to a better deal?
A Closer Look at the SEC and Alameda Research’s Concerns
The SEC and Alameda Research were particularly vocal. While the SEC considered the Binance plan to be a tad skimpy on the details, Alameda grumbled about its loan facility claims. In what can only be described as a financial soap opera, Voyager countered, asserting their loan agreement stemmed from “fraudulent and false representations” made by Alameda. Talk about drama!
The Aftermath: A Tangle of Offers
The aftermath saw Voyager engaging in discussions with 96 interested parties, making it sound like a popular nightclub post-closure. Some offers rolled in from familiar names in the industry, including CrossTower and INX, following the fallout of FTX’s bankruptcy. This continuous bidding process perpetuated the agony of questions over whether Voyager would ever recoup its losses or if users were destined to play the long game waiting for a payout.
So, as this drama unfolds, the future remains cloudy, but one thing is certain—it’s far from boring!
