Voyager Lawyers Clash With Bankman-Fried Over ‘Low Ball’ Buyout Offer

Sam Bankman-Fried’s proposal to buyout Voyager is “a low-ball bid dressed up as a white knight rescue,” bankruptcy lawyers said

share

key takeaways

  • Voyager said it’s open to “any serious proposal” under bidding procedures
  • Bankman-Fried said the lender’s consultants want a drawn-out bankruptcy process to boost fees

Bankruptcy lawyers representing cryptocurrency lender Voyager Digital have slammed a buyout proposal spearheaded by Sam Bankman-Fried’s companies, claiming the offer made several “false and misleading assertions” that violated both debtors and the bankruptcy court.

Voyager Digital responded to a joint offer from Bankman-Fried’s FTX and Alameda Research Ventures (Alameda/FTX) in a court filing lodged Sunday, calling it a “low-ball bid” that would give the crypto billionaire’s businesses an upper hand.

The public proposal emerged in a press release on Friday, which showed FTX and Alameda Ventures’ parent companies offering to buy Voyager’s remaining digital assets and loans, leaving out those made to defunct hedge fund firm Three Arrows Capital (3AC).

Under the same offer, FTX would allow Voyager customers to receive a share of their claims — if they signed up for an FTX account. 

“The Alameda/FTX proposal is nothing more than a liquidation of cryptocurrency on a basis that advantages Alameda/FTX,” lawyers from Kirkland & Ellis wrote. “It’s a low-ball bid dressed up as a white knight rescue.”

Voyager said it would entertain “any serious proposal” made under its bidding procedures, while the joint offer from Bankman-Fried’s firms “was designed to generate publicity” rather than provide value to customers, they added.

Voyager’s lawyers also said the proposal harms customers as it ignores tax consequences, eliminates the firm’s VGX token (which it appraises at $100 million) and declares no value in the Voyager platform or intellectual property. 

“Alameda/FTX’s proposal purports to allow customers to be ‘long crypto’ while receiving cash on account of their claim. But all Alameda/FTX’s proposal actually does is buy customers’ claims at a discount,” they wrote.

Sam Bankman-Fried hits back at Voyager lawyers

In a Twitter thread late Sunday, FTX CEO Bankman-Fried suggested Voyager’s customer funds could be frozen for years, as bankruptcy proceedings often take that long to resolve. “Remember Mt. Gox? That process is still going on,” he tweeted.

Bankman-Fried added: “Voyager’s consultants would be slowly draining the remaining funds by charging fees every month the bankruptcy process dragged on. This didn’t seem right to us. Customers already lost assets; we didn’t want them to lose more.”

Voyager filed for bankruptcy on July 5, days after freezing withdrawals on its platform. This was despite Alameda providing the firm with $500 million in a bid to relieve its financial stress caused by a bad loan to 3AC.

Loading Tweet..

The deal resulted in Bankman-Fried and Alameda retaining a combined 11% stake in Voyager Digital, more than any other shareholder. Alameda is also Voyager’s second-biggest borrower — owing the lender $377 million according to bankruptcy documents (Voyager also owes Alameda $75 million).

Voyager’s lawyers ended their filing with a scathing rebuke of Bankman-Fried’s companies, stating the company reserves all rights and remedies “for [Alameda and FTX’s] clear and intentional subversion of the bankruptcy process and the damages that may be suffered by customers and other creditors as a result.”

They also addressed speculation that Alameda and FTX had an “inside track” to acquire Voyager, based on “some type of sweetheart transaction terms.” 

“Nothing could be further from the truth as evidenced by this response,” they said. “Voyager’s process will not be obstructed by anyone, including Alameda/FTX.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Do Kwon may miss the start of the March 25 trial in the SEC’s case against the former executive and Terraform Labs

article-image

Riot Platforms bought 31,500 more mining machines while CleanSpark has begun operating in Mississippi

article-image

Dencun was activated on all testnets, a blog post Tuesday said

article-image

Hut 8 also announced it broke ground on a Texas mining site

article-image

Uniswap aims to become a “complete platform for swapping” following its latest product releases

article-image

Continued demand for bitcoin ETFs coupled with greater demand for bitcoin from exchanges is contributing to price moves, analysts say