According to court filings, customers of the insolvent cryptocurrency lender Voyager Digital may be eligible to receive 72% of the value of their accounts as part of a tentative agreement with FTX US, as reported by Cointelegraph.
According to Cointelegraph, the tentative sale won’t be final, though, until it has been approved by Voyager’s creditors and the bankruptcy payout plan has been approved by the US bankruptcy judge, according to what he said during the court hearing, “If the plan falls apart, there is no part of this agreement that survives.”
Cointelegraph further noted that a provision known as a “fiduciary out” permits Voyager to terminate the agreement with FTX should any proposals be made that result in a better outcome for creditors.
The clause, which permits businesses to take into account higher offers until the sale is completed in order to ensure creditors obtain the best possible bargain, is frequently included in bankruptcy cases.
Voyager had earlier made a suggestion that its users would eventually switch to the FTX platform after the exchange had won the bidding on September 27 at a valuation of roughly $1.4 billion after a two-week process. The proposed strategy from FTX would allow for the full payment of all priority claims and the restoration of roughly 72% of the value of other account holders’ accounts, which have been frozen since July 1, Cointelegraph further stated.
On July 4, Voyager filed for chapter 11 bankruptcy due to financial problems caused by the failure of the cryptocurrency hedge fund Three Arrows Capital.
The fair market value of FTX US’s crypto holdings as of an undisclosed date, which as of September 26 is estimated to be $1.3 billion, and additional consideration of at least $111 million, according to Voyager, make up the bid.
(With insights from Cointelegraph)
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