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Bankrupt firm Voyager Digital recently announced a successful recovery of $484.35 million from FTX, Three Arrows Capital (3AC), and Directors and Officers (D&O) insurance settlements. This update was provided to the United States Bankruptcy Court for the Southern District of New York as part of the ongoing process of asset recovery and distribution to creditors.
FTX settlement contributed approximately $450 million, representing a significant portion of the original claims made by Voyager creditors. This amount, along with interest, is expected to be distributed in the near future. Additionally, a claim of approximately $675 million was secured from Three Arrows Capital, with Voyager receiving $20.43 million in the initial distribution.
The company anticipates further payments in the coming years as assets are liquidated and litigation recoveries are achieved. A D&O insurance mediation settlement is also expected to contribute at least $14.35 million to Voyager creditors, aiming to alleviate the financial distress experienced by stakeholders.
Voyager also addressed logistical challenges, including uncashed checks totaling $17 million, with a deadline set for April 20, 2024, after which outstanding checks will be considered unclaimed and canceled.
In addition to financial recovery efforts, Voyager is also dealing with the aftermath of a data breach, with investigations ongoing to determine the breach’s source and impact on creditors’ information. The company initially sought Chapter 11 bankruptcy protection in July 2022 during the wider crypto credit crisis affecting lenders and brokers. Approval of Voyager’s bankruptcy proposal was granted on May 17, 2023, following Binance.US’s withdrawal from purchasing $1 billion in assets from Voyager.
Stephen Ehrlich, co-founder of Voyager Digital, faced charges from the Commodity Futures Trading Commission (CFTC) in October 2023 for alleged fraud and failure to register with the agency. The CFTC accused Ehrlich and Voyager of misleading clients about the firm’s financial health leading up to its collapse.
At the time of bankruptcy filing, Voyager disclosed liabilities ranging from $1 billion to $10 billion, highlighting the severe financial challenges that necessitated bankruptcy protection.
