YEREVAN (CoinChapter.com) – Bankrupt crypto lender Voyager Digital refused the buyout offer proposed by crytpo exchange FTX. The latter’s chief executive Sam Bankman-Fried said his firm’s offer would give Voyager customers back 100% of the remaining assets, but Voyager lawyers disagreed, asserting the deal would only benefit FTX.
Buyout offer from FTX
On July 22, Bankman-Fired proposed a restructuring deal to Voyager to attract the bankrupt platform’s customers. According to the agreement proposal, his trading firm Alameda would buy all Voyager digital assets and digital asset loans, except the loans to Three Arrows Capital, in cash at market value.
At the same time, FTX would offer Voyager customers an option to receive their claimed funds by opening a new account on the exchange.
However, the offer stirred mixed reactions. Some experts sided with Bankman-Fried, claiming that the offer would give the affected customers immediate results. For example, Simon Yu, the CEO of blockchain firm StormX, said that “some money back is better than no money.”
I think they probably bid lower because it’s much less time consuming than a bankruptcy process and customers can recover funds faster per Sam’s tweets.added Yu.
However, the opposing team sides with Voyager. The firm responded to the offer with harsh criticism, saying that they would entertain any “serious proposal” made under bidding procedures.
Voyager refuses the offer.
In the official court filing, Voyager lawyers point out that Alameda’s cover letter “openly disparaged Voyager.” Moreover, the team called the statements Alameda made to the public about its proposal “highly misleading.” The firm also added that the proposal aimed to “generate publicity for itself
rather than value for Voyager’s customers.”
Hopefully, customers understand that public dissemination of proposals that subvert aread the court filing.
coordinated, confidential, competitive bidding process can have the effect of chilling bidding.
AlamedaFTX’s actions are not value-maximizing.
Voyager’s legal team further urged its customers to “really read” FTX’s proposal, which they characterized as a “low-ball bid dressed up as a white knight rescue.”
The Proposal requires converting customer cryptocurrency claims into U.S. dollarsexplained Voyager.
based on prices as of July 5, 2022 and paying cryptocurrency claims in U.S. dollars, with customers
bearing the tax consequences associated with dollarizing and liquidating their claims.
By contrast, Voyager’s stand-alone plan, as proposed, “does not aim to dollarize customer claims.” Moreover, the legal team pointed out that FTX’s proposal would effectively eliminate the VGX token, which Voyager believes would “destroy in excess of $100 million in value immediately.”
FTX had customer interests at heart?
FTX CEO defended his stance on Twitter, explaining his intentions and why investors would be “f***ed” if Voyager refused the offer. The CEO built on the premise that the bankruptcy process might drag on for years, with customers getting nothing in the end.
[Our offer] was voluntary–customers wouldn’t have to use it! But there are parties that *would* lose from it.[…]The consultants, for instance, likely want the bankruptcy process to drag out as long as possible maximizing their fees.added the CEO.
Bankman-Fried claimed to have the Voyager customer’s best interest at heart but was met with a wave of criticism. Meanwhile, Voyager lawyers asserted they would entertain any “serious” offers but did not believe that FTX’s proposal would benefit anyone except FTX and its trading platform Alameda.