Voyager creditors balk at immunity for Crypto Lender executives

Voyager Digital Ltd. creditors are challenging plans to provide directors and officers of the crypto lender immunity from lawsuits related to its descent into bankruptcy.

From the company current sale Crypto exchange giant FTX appears to be conditioned on Voyager’s top executives receiving “broad releases” from lawsuits, shielding those “primarily responsible” for the company’s financial troubles, lawyers for the official board of directors said. Voyager’s unsecured creditors in court documents filed Wednesday.

An investigation by creditors into the circumstances surrounding Voyager’s bankruptcy revealed “sobering” findings, but the releases would prevent lawsuits against the directors and officers in question, according to the group of creditors. Details of the investigation are redacted from documents filed in bankruptcy court.

That leaves creditors with a “Hobson’s choice” – either back the protections to quickly get the sale to FTX on the finish line, or risk costly delays as the Chapter 11 proceeding turns into a “quagmire of litigation.” , wrote the lawyers.

Two Voyager board members are also investigating bankruptcy preparations, including lending to a now-defunct hedge fund Capital of the Three Arrows which weighed heavily on the company. If those board members conclude that certain Voyager executives could or should be prosecuted, those individuals would be excluded from the proposed releases, according to court documents.

Voyager should be forced to better explain the need to protect executives, the creditors’ group argues. Legal action against them, if successful, could help Voyager users get more of their money back.

A representative for Voyager declined to comment.

Bankrupt is Voyager Digital Holdings Inc., 22-10943United States Bankruptcy Court for the Southern District of New York (Manhattan).

To contact the reporter on this story:
Jeremy Hill in New York at [email protected]

To contact the editors responsible for this story:
Claire Boston at [email protected]

Taryana Odayar

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