The ongoing crypto winter is taking down the crypto giants one-by-one with crypto lender Voyager Digital shocking the community by announcing that it filed for a Chapter 11 bankruptcy.
Voyager Digital revealed that it has filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court of the Southern District of New York.
According to the press release, Voyager Digital took this decision “to maximize value for all stakeholders.”
In addition to more than $350 million in cash held in the ‘For Benefit of Customers’ (FBO) account at Metropolitan Commercial Bank, Voyager has over $110 million in funds and owned crypto assets on hand to support day-to-day operations during the Chapter 11 process.
Voyager also owns about $1.3 billion in crypto assets on its platform, as well as $650M in claims against Three Arrows Capital (3AC). Well, Three Arrows Capital has already filed for Chapter 15 bankruptcy due to liquidation concerns.
Earlier, Voyager filed a notice of default to 3AC for failing to make the due payments on the previously revealed loan of 15,250 BTC and $350 million USDC.
Stephen Ehrlich, Chief Executive Officer of Voyager, noted “While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital (“3AC”) on a loan from the Company’s subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now.”
A Chapter 11 bankruptcy allows a company to continue operations while it is restructuring its obligations. These restructuring plans must be in the best interests of the company’s creditors.
The Voyager customers’ account access will be restored under the suggested reorganization plan.
Users having crypto in their accounts would receive a combination of their crypto holdings, funds from the 3AC recovery, common shares in the newly reformed company, and Voyager tokens under this plan.
Users having USD in their accounts would be able to access such funds once a reconciliation and fraud prevention process with Metropolitan Commercial Bank is completed.
Voyager Digital also hired Moelis & Company and The Consello Group as financial advisors, Kirkland & Ellis LLP as legal advisors, and Berkeley Research Group, LLC, as restructuring advisors.
The company also disclosed the appointment of four additional independent directors: Jill Frizzley and Timothy Pohl at Voyager Digital LLC, Scott Vogel and Matthew Ray at Voyager Digital Holdings, and Voyager Digital Ltd.
Also Read: Voyager Looking For Strategic Alternatives after Suspension of Withdrawal
On the Voyager platform, trading, deposits, withdrawals, and loyalty awards are still temporarily suspended.
