Customers of bankrupt crypto lender Voyager Digital Ltd. may recover about 72% of the value of their accounts under a tentative deal for the company to sell itself to FTX US, the digital-asset exchange.
Under the arrangement approved by US Bankruptcy Judge Michael E. Wiles on Wednesday, the company can cancel its deal with FTX should it get a higher offer that pays customers more. The sale can’t close until Wiles approves Voyager’s bankruptcy payout plan, which the Manhattan-based judge may consider in December.
FTX won a two week-long auction for Voyager under a deal tied to court approval of the creditor payment plan, lawyers said during a court hearing held by telephone. Wiles pressed Voyager to include a standard bankruptcy clause called a “fiduciary out,” which allows a company under court protection to consider higher offers until a sale is final.
FTX is providing “the only viable alternative” for the company, Voyager bankruptcy attorney Christine Okike told Wiles. The company agreed to change how the fiduciary out is worded to ensure a better offer can be considered.
The company has also asked Wiles to give it permission to send the payout plan to creditors, including crypto customers, for a vote. Should creditors vote in favor, Wiles would have the final word on whether the plan, and the proposed sale, are approved.
The sale to FTX is valued at about $1.4 billion, of which $51 million is in cash. As part of the sale, FTX would move customers on to its platform. Under the payout plan, customers who had digital currencies on Voyager’s platform can be paid in that form once FTX takes over, if FTX supports that type of currency, lawyers told Wiles.
The bankruptcy is Voyager Digital Holdings Inc., 22-10943, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).
