Voyager Digital balks at ‘low-ball’ bid from FTX and Alameda

By Sarah Lizee

Olympia, Wash., July 25 – Voyager Digital Ltd. responded to a press release and buyout offer from its competitors and largest stakeholders, Alameda Ventures Ltd. and FTX Trading Ltd., in court documents filed Sunday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the day after Voyager filed its bid procedures motion, Alameda and FTX issued a press release regarding a buyout proposal.

Voyager said Sunday that the proposal was made in contravention of the proposed bid procedures and was designed to generate publicity for Alameda and FTX rather than value for Voyager’s customers.

“Hopefully customers understand that public dissemination of proposals that subvert a coordinated, confidential, competitive bidding process can have the effect of chilling bidding,” the company said in court documents.

Voyager called the proposal “nothing more than a liquidation of cryptocurrency on a basis that advantages AlamedaFTX,” and a “low-ball bid dressed up as a white knight rescue.”

FTX, Alameda offer

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.

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.

Bid procedures

Voyager is seeking court approval of the bid procedures for the assets, as well as approval to select one or more stalking horse bidders.

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.

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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