- The lender tweeted that the liquidation procedures had been approved today
- Liquidation is the most reasonable course because the lender doesn’t have enough assets
US bankruptcy court judge Michael Wiles approved Voyager Digital’s Chapter 11 plan, giving the insolvent lender the green light to terminate operations and start satisfying customers’ claims, AMB Crypto reported.
Former customers aren’t thrilled
Voyager filed the plan with the court earlier this month. On May 18, the lender tweeted that the liquidation procedures had been approved, to the chagrin of many followers on the medium.
Former customers of the lender complained their money and time had been wasted and the liquidation could have been approved back in September, a few months after the lender filed for bankruptcy. Instead, legal procedures dragged on, and customer funds were used to cover the ensuing costs.
Lender will finally make good on (some) claims
The most recent announcement paved the way for asset distribution. Judge Wiles is aware that customers are unhappy with his oversight of the company’s Chapter 11 proceedings. He explained that liquidation was the most reasonable course of action, because the lender doesn’t have enough assets to cover all the claims.
The lender shared a roadmap, according to which the Chapter 11 plan might take effect as soon as Friday, May 19. When it does, the lender’s creditors committee will be dissolved and the bankruptcy plan administrator will take charge. On that note, one Twitter user demanded the administrator’s handle, so they can keep him in check.
Lender to start making distributions before June 1
The bankruptcy estate intends to start making initial distributions before the beginning of next month. The bankrupt crypto lender will only be able to return 35% of the funds owed to customers. The rest will be retained pending resolutions of disputes with third parties.
Assets are worth $1.3B, but less than half will go to customers
The lender’s bankruptcy estate holds assets worth around $1.3 billion, which comprise three-fourths of the debt to customers.
Voyager will retain $445 million for preference claims associated with FTX and its affiliate Alameda Research, $135 million for costs to wind down operations, and $49 million for administrative claims. This leaves just $629 million for the company’s former clients.
