Clients of bankrupt cryptocurrency lender Voyager Digital could recover 72% of the value of their accounts under a tentative deal with FTX USaccording to court documents.
Nevertheless, US Bankruptcy Judge Michael Wiles said during a court hearing that the tentative sale would not be final until it receives approval from Voyager’s creditors and he approves the bankruptcy payment plan. He added during the court hearing:
“If the plan falls apart, no part of this deal will survive.”
Also included is a so-called “fiduciary out” clause, which allows Voyager to cancel the deal with FTX in the event of offers that offer a better outcome for creditors.
The clause is often included in bankruptcy casesand allows businesses to consider higher offers until the sale is finalized to ensure creditors get the best possible deal.
Voyager had previously hinted that its clients could move to the FTX platform after the exchange secured the winning bid on Sept. 27. with a valuation of approximately USD 1,400 million after a bidding process of two weeks.
FTX’s tentative plan would allow it to pay all priority claims in full and allow other account holders to recover approximately 72% of the value of their accounts, that are frozen since July 1.
The figure does not include funds it could recover as part of its claim against Three Arrows Capital (3AC) after the cryptocurrency hedge fund defaulted on its loans to Voyager.
Any additional funds received as part of this claim will allow Voyager account holders to recover a greater percentage of their frozen accounts.
Voyager had filed for Chapter 11 bankruptcy on July 4 due to liquidity problems. following the default of cryptocurrency hedge fund Three Arrows Capital.
Voyager said FTX US’s offer was made up of the fair market value of its cryptocurrency holdings as of a date to be determined, estimated to be $1.3 billion as of September 26, as well as additional consideration of at least $1.3 billion. 111 million.
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