A Voyager creditor and financial lawyer wants a trustee (or administrator) appointed in the Voyager Digital bankruptcy lawsuit, which would mean Voyager would lose control of her estate.
In a February 1 motion, Voyager’s creditor Michelle DiVita accused Voyager of having a “history of financial statement inaccuracies and public misrepresentations that were known, or reasonably discoverable, at the beginning of the bankruptcy proceedings.”
Because of this pre-bankruptcy conduct, DiVita believes that an examiner or receiver should have been called in and is now doing it herself.
The filing alleges that Voyager “concealed the true nature of its lending activities by publishing financial reports that materially understated its lending positions by more than $1 billion.”
@investvoyager Loans disclosed on March 31 financial report: $2.2B.
Current loans on April 3: $3.1B
$1.1B concealed in one business day.
Releases are unrestricted @VoyagerUCC @DOJCrimDiv #VGX pic.twitter.com/dP8g9yvY48
—Michelle DiVita (@ChelleDiVita) January 13, 2023
@investvoyager loans reported in March 31 financial report: $2.2 billion. Actual loans on April 3: $3.1 billion. $1.1 billion hidden in one business day. The releases are excessive. @VoyagerUCC @DOJCrimDiv #VGX
Shigo Lavine, Voyager’s former director and chief investment officer, highlighted some of the top allegations formulated in the presentation in a lengthy Twitter thread on February 1.
For example, Voyager allegedly understated a loan to cryptocurrency hedge fund Three Arrows Capital by $609 million and understated bitcoin (BTC) in its financial reports by 546% to downplay the size of its loans.
The Debtor provided assurances in regards to its ability to raise capital and meet liquidity requirements.
This led many (including myself) to incorrectly conclude that Voyager would be able to survive this despite 3AC going under pic.twitter.com/jjnloWDG7A
— Shingo Lavine (@shingolavine) February 1, 2023
The debtor provided guarantees on its ability to raise capital and meet liquidity requirements. This led many (myself included) to wrongly conclude that Voyager would be able to survive despite 3AC’s bankruptcy.
According to the presentation, the cryptocurrency exchange Coinbase also learned of Voyager’s “financial reporting inconsistencies” and had reportedly backed out of a potential deal to acquire Voyager’s assets after finding that “the financials don’t add up.”
An administrator from the United States is already involved in the bankruptcy proceedings, that it must file a motion to appoint a Chapter 11 trustee when there are “reasonable grounds to suspect” that the debtor “engaged in actual fraud, dishonesty, or criminal conduct.”
The trustee appoints a creditors’ committee and reviews professional compensation claims, among other duties, but may also hire a bankruptcy administrator to manage the debtor’s affairs if the debtor is unable to do so himself.
Cointelegraph has contacted Voyager for a response to the allegations and the motion, but did not receive an immediate response.
In other news, both Voyager and its creditors have opposed an attempt by bankrupt commercial firm Alameda Research to recover $446 million in loan repayments.
After filing Chapter 11 bankruptcy proceedings on July 5, Voyager demanded the return of all its outstanding loans to Alameda, which was repaid in full.
However, Alameda tried to recover the funds in a court filing on January 30, arguing that because they repaid the loans within 90 days of the Chapter 11 bankruptcy filing, they could “recapture” these funds for the benefit of Alameda’s creditors.
Voyager claims its creditors have suffered “substantial harm” because Alameda made an offer for Voyager’s assets that it failed to fulfill, costing them more than $100 million. Voyager argues that this makes Alameda’s claim subordinate to those of its other creditors.
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