The sale plan proposal for Voyager Digital includes plans to settle with executives over their potential missteps in the loan to bankrupt crypto hedge fund Three Arrows Capital.

The proposal was revealed in new court filings that were presented in the Voyager bankruptcy case. 

CEO Stephen Ehrlich and previous CFO Evan Psaropoulos had previously agreed to lend 3AC $1 billion in crypto. However, following the collapse of Terra, the hedge fund collapsed, leaving Voyager with an enormous claim. Voyager issued a default notice against 3AC for failure to repay the loan and had to declare bankruptcy weeks later.

This raised questions about whether Ehrlich and Psaropoulos conducted the proper due diligence before providing the loan.

However, an investigation into these allegations found that there was no evidence of fraud or mismanagement that could be proven in court. Therefore, the recommendation is to settle with the executives for an amount between $1.3 million and $3 million from their personal assets and up to $20 million through insurance. 

“The Special Committee made the decision to settle, subject to Court approval, based on the fact that the individuals do not have personal assets available to satisfy any potential judgment even if the claims were successfully prosecuted, whereas the cost of prosecuting would likely dissipate the available D&O insurance coverage and the assets that are being paid through the settlement in defense costs,” said the filing.

The news comes days after it was revealed that the top executives of the company were trying to acquire legal immunity, an idea that was widely rejected by the creditors committee.