Voyager Digital announced that it has successfully recovered $484.35 million in settlements with FTX, Three Arrows Capital (3AC), and directors and officers (D&O) insurance. Of this, approximately $450 million of the recovered funds came from the settlement with FTX.
The announcement was part of a status update filed with the U.S. Bankruptcy Court for the Southern District of New York, outlining efforts to recover assets for and distribute to creditors following the company’s financial decline.
$450M FTX Settlement and Significant Recovery
According to an April 9 filing, approximately $450 million in recovered funds are related to the FTX settlement. The agreement (with interest) represents approximately 25% of the original claims of Voyager creditors. The company plans to distribute the funds in its next upcoming distribution round, providing much-needed financial relief to its creditors.
The FTX debtors have agreed to waive their rights to the $5 million deposit held in escrow during the Voyager bankruptcy sale, with those funds set to go to the liquidating debtors’ estates.
In addition, the FTX Debtors and the Liquidating Debtors waive and release all claims against each other, including any previously filed proofs of claim. The agreement includes the dismissal of the ongoing FTX case.
Voyager also revealed that it has received approximately $675 million in claims from its ongoing litigation with Three Arrows Capital (3AC). Of this amount, $20.43 million represents Voyager’s pro rata share of 3AC’s initial distribution.
The plan administrator anticipates that further payments will be made as it progresses through the court process and as assets are sold.
In addition to the aforementioned settlement agreement, Voyager also announced that it has made significant progress in the mediation process of its directors and officers liability insurance (D&O) policy, through which at least $14.35 million in funds will be distributed to its creditors, which will further assist the company's financial recovery efforts.
Operational Challenges
However, amid these positive developments, Voyager faces operational challenges, including dealing with uncashed checks. Approximately 270,000 checks totaling $17 million remain uncashed, with the majority (about 187,000) being for amounts less than $25.
To address this issue, Voyager has set a deadline of April 20, 2024, after which all uncashed checks will be considered unclaimed and canceled.
Voyager is also dealing with the fallout from the FTX data breach, which has added complexity to its bankruptcy proceedings. An ongoing investigation is aimed at determining the root causes and consequences of the breach that leaked creditor information.
Voyager initiated Chapter 11 bankruptcy proceedings in July 2022 following major events in the cryptocurrency market, such as the collapse of the Terra ecosystem in May.
By May 2023, Voyager proposed a restructuring plan under which its customers could recover cryptocurrency or cash equal to 35.7% of their claims. Subsequently, in November 2023, the cryptocurrency exchange reached a settlement with the Federal Trade Commission (FTC), agreeing to provide monetary relief worth $16.5 billion. #VoyagerDigital #達成和解
