Former Voyager Digital executive seeks to file competing restructuring plan

A former executive and board member of Voyager Digital is seeking more information to support its own restructuring plan for the now struggling crypto lender’s bankruptcy proceedings.

Driving the news: Shingo Lavine, who was chief innovation officer of Voyager Digital and a member of the board of directors until February 2021, told Axios why the company filed an objection in the United States Bankruptcy Court, Southern District. from New York.

What they say: “We have tried to enter the data room and become an ‘approved bidder’, but to no avail so far. We don’t think this is very conducive to a fair bidding process – especially since we have a good faith offer,” Lavine said in an email to Axios.

  • To note : Voyager Digital filed for bankruptcy on July 5 and has an exclusivity period under Chapter 11 law to file a plan.
  • “Debtors initially have 120 days unless someone files a petition to shorten it,” Robert Honeywell, restructuring partner at K&L Gates, told Axios.

Backtrack: Voyager Digital in 2019 acquired the Ethos Universal Wallet and its enterprise blockchain called Bedrock from Ethos.io, which Lavine co-founded.

  • The acquisition was finalized for 7,250,000 shares of VYGR.

What they say : “At the beginning of 2021, however, I disagreed with the management of the company and certain decisions made. Due to these disagreements, I resigned from the board and left the company in February 2021”, Lavine said in a statement from Emerald Ocean Ventures Thursday evening.

  • Voyager this year shut down the Universal Wallet, Lavine said, “Rather than individuals keeping their crypto, it was instead placed in shuffled accounts and loaned out to third parties in risky transactions.”
  • Voyager Digital declined to comment.

The context: Lavine, via Emerald Ocean, files an objection as creditor. It is one of the very many companies and customers that Voyager Digital owes.

  • “We, the co-founders of Ethos.io, have been working to develop a restructuring plan to provide greater recovery for creditors caught in the bankruptcy of Voyager,” Emerald Ocean Ventures said in today’s statement. the following day.
  • “While we don’t know the reasons why debtors have not been more accommodating, we are concerned that management may be trying to maintain control.”

Between the lines: Emerald Ocean Ventures would like some say how Voyager Digital is restructuring, so the company has greater control over how much and in what denomination the crypto lender will pay them back.

  • Emerald Ocean Ventures presented an 8-step plan in its announcement, offering, among other things, a “recovery token”.

Details“Provide a major additional benefit to unsecured creditors and encourage customer retention with a “recovery token” in addition to VGX tokens.

Quick catch up: Emerald Ocean Ventures’ objection to the case follows the FDIC and Federal Reserve Board’s decision to prohibit Voyager Digital from making false or misleading claims about deposit insurance status – statements that Voyager has been making since at least 2020.

To note: Lavine says Voyager Digital’s bankruptcy was the result of its “risky, unprofitable and unsustainable” rewards program that promised customers extremely high returns.

  • He adds that the “cryptopocalypse,” or market downturn that Voyager Digital mentions in its bankruptcy filings, was “merely the match that lit the fire” and not the cause of its insolvency.

The bottom line: The new wrinkle in Voyager Digital’s bankruptcy proceedings is expected to lengthen the time it will take for the crypto lender’s clients to obtain closure.

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