Bankrupt cryptocurrency lending firm Voyager Digital Ltd. VYGVQ has sought creditors' approval for its $1.42 billion sale to cryptocurrency exchange FTX, after securing an initial court clearance.
U.S. Bankruptcy Judge Michael Wiles said that as long as Voyager remains open to larger and better proposals than the FTX bid, he would accept Voyager's sale contract and creditor solicitation materials.
According to Wiles, the deal will not be official until it receives the go-ahead from creditors as part of the Chapter 11 bankruptcy plan.
"If the plan falls apart, there's no part of this agreement that survives," Wiles said, according to Reuters.
Sam Bankman-Fried's FTX had placed the winning offer after a two-week auction held in September.
If creditors accept the transaction, the majority of Voyager clients would switch to accounts on FTX's platform.
Even though the value of those cryptocurrency assets may have decreased since the bankruptcy filing, clients would still get back 72% of what they had with Voyager earlier.
Voyager Account Holders Are Primary Creditors
According to court filings, Voyager account holders are the primary bankruptcy creditors, with claims totaling $1.76 billion.
Voyager plans to seek final approval of the sale during a confirmation hearing in December, and creditor votes are required by Nov. 29.
Voyager sought bankruptcy protection in July, and according to court filings, is still pursuing payment from Three Arrows Capital, which is also insolvent, which may result in extra revenue for Voyager's clients.
At the court hearing, a lawyer for CrossTower said that the digital currency trading company "remains fully invested" in a contract to purchase Voyager Digital's assets.
Disclosure: Benzinga CEO Jason Raznick Is a member of the unsecured creditor committee in the Voyager Digital bankruptcy case.
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