Voyager Victim Calls For Trustee To Seize Control Of The Estate

The 120-page Motion came from a Creditor who asked for the appointment of a chapter 11 Trustee. A Voyager Creditor and finance lawyer wants to see a chapter 11 trustee appointed in Crypto brokerage Voyager Digital’s bankruptcy trial, which would see Voyager lose control of its estate.

In a Feb.At the start of the Bankruptcy proceeding, Voyager was accused of having a history of financial statement inaccuracies and public misrepresentations.

Because of this Pre-Bankruptcy conduct, DiVita believes that an examiner or trustee should have been requested, and is now doing so herself.

According to the filing, Voyager concealed the true nature of lending activities by publishing financial reports that overstated its loan positions.

@investvoyager loans disclosed on March 31 financial report: $2.2B.

Actual loans on April 3: $3.1B

$1.1B concealed in one business day.

Releases are unconscionable @VoyagerUCC @DOJCrimDiv #VGX pic.twitter.com/dP8g9yvY48

— Michelle DiVita (@ChelleDiVita) January 13, 2023

Shigo Lavine, a former director and CIO for Voyager, highlighted some of the key accusations made in the filing.There is one thread on social media.

For example, Voyager allegedly underreported a loan to Crypto hedge fund Three Arrows Capital by $609 million and furthermore undervalued Bitcoin in its financial reports by 546% to downplay the size of its loans.

Not only that, but the debtors materially undervalued BTC to underreport crypto loans. Previously also caught by @ChelleDiVita

Financials: $7046.23/BTC
Actual Market Price: $45,538.68 (Δ of 546%)https://t.co/r7uaLDeIRv pic.twitter.com/NSdW74Xyie

— Shingo Lavine (@shingolavine) February 1, 2023

The Debtor provided assurances in regards to its ability to raise capital and meet liquidity requirements.

This led many (including myself) to incorrectly conclude that Voyager would be able to survive this despite 3AC going under pic.twitter.com/jjnloWDG7A

— Shingo Lavine (@shingolavine) February 1, 2023

Here’s a game – can YOU find the error in the below breakdown of crypto assets loaned by @investvoyager? Taken from the last-published MD&A as of March 31, 2022. pic.twitter.com/8mLwFihldU

— Michelle DiVita (@ChelleDiVita) November 17, 2022

According to the filing, crypto exchange Coinbase also found out about Voyager’s “financial detailing inconsistencies,” and had reportedly backed out of a potential deal to acquire the assets of Voyager in the wake of finding “the financials don’t make any sense.”

The bankruptcy proceedings as of now include a United States Trustee, who is required to bring a motion to appoint a chapter 11 trustee when there are “reasonable grounds to suspect” that the debtor “participated in actual fraud, dishonesty or criminal conduct.”

While the U.S. Trustee appoints a creditors committee and reviews applications for the recompensation of professionals among different duties, they may also employ a bankruptcy trustee to manage the debtor’s affairs if the debtors are not allowed to do it Themselves.

Voyager for a reaction to the allegations and the motion however didn’t receive an immediate reaction.

Elsewhere in the world, both Voyager and its creditors have pushed back at an attempt by bankrupt trading firm Alameda Research to Claw back $446 million in loan repayments.

After commencing chapter 11 proceedings on Jul. 5, The outstanding loans to Alameda were repaid in full. Alameda wanted to recover the funds. The 30 court filing argued that because they repaid the loans in the span of 90 days, they could claw back the funds for the benefit of the Alameda creditor.

Due to the fact that Alameda made a bid for the assets that it could not honor, they have suffered substantial harm.Voyager argues that this makes Alameda’s Claim subordinate to those of its Different Creditors.