In the cryptocurrency brokerage Voyager Digital's bankruptcy trial, a creditor and finance lawyer wants to see a chapter 11 trustee installed, that would result in Voyager losing control of its property. Michelle DiVita, a creditor of Voyager, said in a motion filed on February 1 that the company had a “history of financial statement mistakes and public misrepresentations that were known, or reasonably discoverable, at the beginning of the bankruptcy action.”
DiVita feels that an examiner or trustee ought to have been called due to this pre-bankruptcy behavior, and she is already making the request.
Voyager is accused of hiding the true nature of its lending activities by producing financial statements that grossly overstated its loan situation by more than $1 billion USD, according to the complaint.
For instance, to minimize the extent of its debts, Voyager allegedly ignored by the media a loan of $609 million to cryptocurrency hedge fund Three Arrows Capital and also devalued Bitcoin by 546 percent in its financial filings.
The complaint claims that cryptocurrency exchange Coinbase was also made aware of Voyager's “financial reporting irregularities” and that it subsequently backed out of a deal to buy Voyager's assets because “the financials don't line up.” Whenever there are “reasonable grounds to suspect” that the borrower “participated in actual fraud, dishonesty, or criminal activity,” the United States Trustee, who is currently a party to the bankruptcy process, must file a motion to appoint a chapter 11 trustee.
Although the U.S. Among other things, the trustee creates a creditors committee and evaluates requests for professional remuneration. If the debtors are unable to manage their own affairs, the trustee may also employ a bankruptcy trustee to do so.
In order to get a reply to the accusations and the motion, Cointelegraph contacted Voyager, but did not immediately hear back. In other headlines, Alameda Research, a bankrupt trading company, has been resisted by both Voyager and its creditors in its quest to recoup $446 million in debt repayments.
Voyager claimed payback for all of its unpaid loans to Alameda after starting chapter 11 proceedings on July 5. It was completely paid back.
Alameda argued that since they payed back the loans within 90 days of declaring chapter 11 bankruptcy on its own, they were entitled to “claw back” these monies for the benefit of Alameda creditors in a suit filed on January 30. Voyager claims that as a result of Alameda offering a price for its property that it was unable to accept, which cost them more than $100 million, its creditors have experienced “substantial harm.” As a result, according to Voyager, Alameda's claim is inferior to that of its other creditors.
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