Voyager amends asset purchase agreement and gains committee support

By Sarah Lizee

Olympia, Wash., Jan. 9 – Voyager Digital Ltd.’s proposed asset purchase agreement with Binance US (BAM Trading Services Inc.) gained support from the official committee of unsecured creditors after amendments were made to the documents, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said that the initial drafts of the deal were “problematic,” despite the economically attractive and actionable offer from Binance.

The group said it worked to negotiate protections in the asset purchase agreement with Binance to accelerate recoveries to creditors and ensure that all crypto would be safe in the event of a Binance insolvency.

“Recognizing the unstable state of the crypto industry following FTX’s collapse, the committee was principally concerned with protecting crypto that would be transferred to Binance,” the committee said.

The initial proposal contemplated the transfer of nearly all of the debtors’ crypto immediately upon closing to Binance. However, some of that crypto would not be made available to creditors for up to six months because of, among other things, regulatory restrictions in four states.

This structure would have put creditors at risk in the event of an unexpected Binance insolvency.

Binance ultimately agreed to restructure the way in which the crypto is transferred, and the asset purchase agreement was amended.

Under the new structure, after the sale closes, crypto will move from the debtors to Binance on a weekly basis, and the only crypto that will be transferred is crypto that will be immediately distributed to creditor accounts.

In other words, the crypto won’t be transferred to Binance unless it has the required licenses or authorizations to make distributions in a creditor’s state or territory; a creditor has signed up for Binance’s platform; that creditor has met Binance’s onboarding requirements; and Binance has received notice of the exact amount of distribution that will be made available to that creditor.

As a result, the time between when Binance receives the crypto and when creditors can access, trade, convert, sell, stake or withdraw that crypto is now very limited.

The documentation was also amended to provide a mechanism under which account holders in unsupported jurisdictions may be able to receive distributions in kind, which is the preference of many creditors.

The committee said it believes the transaction, relative to any alternatives, provides the highest and best value for all creditors.

As previously reported, Binance’s bid is valued at roughly $1.022 billion based on the fair market value of Voyager’s cryptocurrency portfolio at a to-be-determined date in the future plus a $20 million incremental cash value.

A hearing on the asset purchase agreement is scheduled for Jan. 10.

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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