Voyager Digital’s unsecured creditors committee (UCC) is opposing one condition of the agreement between the lender and FTX.
According to the sales deal recently revealed in a court filing, Voyager executives want to be granted legal immunity from future lawsuits.
As of now, creditors have two choices: to accept the agreement as it is with the possibility of receiving their funds more quickly, or to challenge the terms of the deal and risk the bankruptcy process, which would probably make it much harder to recuperate the funds in the near future.
In response to the legal immunity condition, the committee filed an objection and is now asking the court to include a third option to allow creditors the chance to vote in favor of the sale but against the liberation of the executives’ responsibility in the collapse of the company.
“This attempt to protect the individuals principally responsible for the Debtors’ financial woes is particularly egregious given that (i) there are colorable and valuable causes of action against these directors and officers, (ii) the releases are extraneous to effectuation of the sale transaction, and (iii) the beneficiaries of the releases are providing the Debtors with no consideration whatsoever in exchange for the releases,” the objection said.
Voyager filed for bankruptcy in July, following the collapse of Three Arrows Capital. Sam Bankman-Fried’s crypto exchange FTX won the auction for the distressed assets of the bankrupt crypto brokerage a few weeks ago, and agreed to pay $1.4 billion.