CRYPTO-BANKRUPTCY UPDATE : Binance.US Backs Out of Voyager Deal, Leading to Liquidation of Voyager Assets in the Bankruptcy
We recently reported on the Bankruptcy Court’s decision to approve a chapter 11 plan providing that Voyager Digital Holdings Inc. (“Voyager”) could sell its customer accounts to Binance.US, as well as the appeal of that decision by the federal government and the U.S. Trustee's office (“Appellants”). Also reported was the District Court’s grant of the Appellants’ emergency application for a stay pending appeal of the bankruptcy court’s order (“Stay Pending Appeal”). See Case No. 1:23-cv-02171 (S.D.N.Y. Mar. 27, 2023).
Voyager and the official committee of unsecured creditors (“UCC”) both sought an emergency order to lift the Stay Pending Appeal to the United States Court of Appeals for the Second Circuit. After the Second Circuit denied the request, Voyager and the Appellants reached a deal to allow the sale to move forward while the appeals continued while preserving the contested claims releases.
This week, however, Binance.US announced it was backing out of the $1.3 billion dollar asset purchase deal with Voyager, citing a “hostile and uncertain regulatory climate” that “introduced an unpredictable operating environment.” Due to this decision, Voyager will shift from a sale to a liquidation of its assets. Given the breakdown of the Binance.US deal, Voyager’s counsel stated that creditors can expect recovery in the range of 40% to 65%, depending on the outcome of pending litigation with FTX.
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