Voyager Digital sets bid procedures; FTX, Alameda make offer

By Sarah Lizee

Olympia, Wash., July 22 – Voyager Digital Ltd. is seeking court approval of bid procedures for its assets and approval to select one or more stalking horse bidders, according to a motion filed with the U.S. Bankruptcy Court for the Southern District of New York.

The company said the bid procedures will allow the debtors to close a sale of the debtors’ equity or assets, or to confirm a Chapter 11 plan.

Under the proposed bid procedures, bids would be due by noon ET on Aug. 26, an auction would be held on Aug. 29, and a sale hearing would be held on Sept. 7. In addition, the disclosure statement hearing would be held on Oct. 12, and a confirmation hearing would be held on Nov. 23.

The company said the dual timelines contemplated in the sale schedule and confirmation schedule are essential for the debtors’ quick emergence from Chapter 11 and preserving the value of the debtors’ estates.

FTX, Alameda make offer

On Friday afternoon, FTX Trading Ltd., a cryptocurrency exchange, announced a joint offer with West Realm Shires Inc., the owner and operator of FTX US, and Alameda Ventures Ltd., to provide early liquidity to customers of Voyager.

Under the joint proposal, customers of Voyager would have the opportunity to start a new account with FTX with an opening cash balance funded by an early distribution on a portion of their bankruptcy claims.

Customers would be able to withdraw their cash immediately, or use it to purchase digital assets on the FTX platform. No customer is required to participate, and participation in the joint proposal is fully voluntary.

FTX said it hopes to close the transaction as promptly as possible, preferably in early August, subject to the requirements of the Chapter 11 process and the need for court approval.

Neither FTX nor other participants in the joint proposal would be acquiring Voyager’s loans to Three Arrows Capital or related litigation claims.

The joint proposal anticipates that Voyager would pursue its rights with respect to Three Arrows Capital matters and any recoveries would be available to fund supplemental distributions to customers, whether or not such customers open accounts with FTX.

According to a term sheet filed with the press release, the purchase price would be equal to the fair market value of the digital assets as of the second trading day prior to the closing date. With respect to customer information and exclusive referral rights for their accounts, the buyers would pay $15 million.

Alameda agreed to write off its own $75 million loan claim as part of the proposed transaction. This claim would otherwise share in supplemental recoveries. Writing off the loan will permit customers and other unsecured creditors to receive 100% of any incremental recoveries from the enforcement of the Three Arrows Capital claim and any related litigation claims.

FTX and Alameda said they will pay their own expenses and seek no financial bid protections.

“We understand that you are soliciting interest in Voyager’s business from other potential buyers and have asked for indications of interest by July 29,” FTX and Alameda said in a letter attached to the release.

“We have no concern with your doing so while also working expeditiously with us.”

Voyager Digital is a cryptocurrency broker based in New York. The company filed bankruptcy on July 5 under Chapter 11 case number 22-10945.

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