Voyager disclosure statement conditionally approved; Binance buy OK’d

By Sarah Lizee

Olympia, Wash., Jan. 13 – Voyager Digital Ltd. received conditional approval of the disclosure statement for its third amended Chapter 11 plan on Friday, according to an order filed with the U.S. Bankruptcy Court for the Southern District of New York.

The combined hearing on final approval of the disclosure statement and confirmation of the plan is scheduled for March 2.

The company also received on Friday court approval to sell its assets to BAM Trading Services Inc. (Binance US) in a transaction 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.

As previously reported, the deal gained support from the official committee of unsecured creditors after amendments made to the documentation. Now, 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.

Plan terms

Notably, the plan includes a toggle feature, under which the debtors may return cryptocurrency, cash and other assets to claimholders if the sale transaction is unable to close on time.

Under the revised plan, secured tax claims and $1 million of other priority claims are unimpaired.

The voting classes include account holder claims ($1,763,800,000 of claims with a projected recovery of 50% if there is a sale transaction) and three subclasses of general unsecured claims ($6.6 million for OpCo with a 50% recovery, $15.7 million for HoldCo with a 1% recovery and $3 million with a 66% recovery for TopCo, with estimated recoveries based on a sale transaction).

Deemed to reject the plan, with impaired claims, are the Alameda loan facility claimants ($75.1 million with no recovery), section 510(b) claimants and existing equity interests.

Presumed to accept and not entitled to vote are claimants with intercompany claims and intercompany interests.

The debtors believe that “time is of the essence” and they must move through the Chapter 11 cases as quickly as possible.

Should the sale transaction not be consummated and the debtors find it necessary to conduct a Chapter 11 liquidation, the claimants might expect to receive less, especially the account holder class which would be facing a 45% recovery on their claims.

Objections to the plan are due by 4 p.m. ET on Feb. 22.

Voyager Digital is a cryptocurrency broker based in New York. The company filed bankruptcy on July 5, 2022 under Chapter 11 case number 22-10945.

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