Bankrupt cryptocurrency brokerage Voyager Digital filed documents with a United States court on Jan. 8 in response to objections raised to Binance US’s proposal to buy its debt.. Voyager announced that it had approved the offer on December 19. The Securities and Exchange Commission (SEC), four states, the US Trustee and Alameda Research filed objections to it.
Voyager stated in a document that the objections to Binance US’s offer “do not present any factual or legal support” in their arguments, while Binance US offered creditors higher recovery rates than other proposals and a quick recovery.
Voyager’s decision to accept Binance.US’s plan was an exercise in good business judgment, he argued. The “business judgment rule” is a legal doctrine that describes how courts should honor the decisions of a company’s executives. The document stated:
“The Objections ignore the practical realities of these chapter 11 cases and fail to identify any transaction that would provide a better outcome for the Debtors’ creditors. There are none. And time is of the essence in these Chapter 11 cases.”
Voyager also noted that the deal preserved their “‘fiduciary exit’ in the event a higher or better alternative transaction was proposed.”
Objections from the US Trustee and from the states of Vermont, New York, Texas and Hawaii were dismissed in the document as “premature.”
A second, longer response, dated Jan. 8, detailed the alleged adequacy of the information provided in Binance.US’s plan and argued in detail that further objections are premature and, in the case of Alameda Research, frivolous.
The SEC had filed a limited objection to Binance.US’s plan on Jan. 4, claiming that the plan was not detailed enough. Alameda alleged that the plan did not honor its loan claims, which Voyager said only entered into the loan agreement “on the basis of AlamedaFTX’s fraudulent and false representations.”. Voyager entered into a $500 million loan agreement with Alameda to help it cover losses it experienced following the bankruptcy of cryptocurrency venture capital firm Three Arrows Capital.
The @binance offer to buy @investvoyager for $1.02B makes no sense, unless they’re not planning to make users whole.
$1B of is owed to Voyager customers.
Let’s GENEROUSLY assume that Binance keeps 1M of the 3.5M Voyager users.
$1000 per user is ridiculous.
What’s CZ’s angle?
— Cory Swan.com #Bitcoin WORKS (@coryklippsten) January 9, 2023
@binance’s offer to buy @investvoyager for $1.02 billion is meaningless, unless they are not planning to compensate users.
$1 billion owed to Voyager customers.
Let’s GENEROUSLY assume that Binance keeps 1M of Voyager’s 3.5M users.
$1,000 per user is ridiculous.
What is CZ’s point of view?
Voyager filed for Chapter 11 bankruptcy on July 5. According to the terse court filing on January 8, Voyager has entered into discussions with 96 third parties interested in its business.
FTX US won the auction for the Voyager assets in September. The bidding process resumed after FTX’s bankruptcy, leading to bids from CrossTower, INX and others.
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