Court Approves Voyager’s Entry into Asset Purchase Agreement with FTX US

What did the Court approve?

As part of a multi-step process, the Court approved Voyager’s entry into the asset purchase agreement between FTX US and Voyager. FTX US’s bid, valued at approximately $1.422 billion, is comprised of (i) the fair market value of all Voyager cryptocurrency at a to-be-determined future date prior to closing of the sale, which at current market prices as of September 26th is estimated to be $1.311 billion, plus (ii) additional consideration which is estimated to provide approximately $111 million of incremental value to creditors. Voyager’s claims against Three Arrows Capital will remain with the bankruptcy estate and any recovery on account of the 3AC claims will be available for additional distribution to Voyager creditors.

What are the next steps?

Following approval of its entry into the agreement, Voyager will move forward with a customer vote on the broader Plan, through which the sale to FTX US will be implemented. The deadline to vote on the Plan is November 29. Because we believe the Plan, including the sale to FTX US, maximizes recoveries to Voyager’s creditors, we urge all customers and creditors to vote in favor of the Plan.

How do I vote?

In the coming days, our claims agent Stretto will send solicitation packets to all creditors entitled to vote on the plan, including customers. The solicitation packet includes voting instructions and the approved Disclosure Statement, which provides further details on the Plan. We encourage you to read the entire solicitation packet before submitting your ballot, whether you vote online or by mail.

For your vote to be counted, you must return your ballot to Stretto by the voting deadline of November 29th at 4:00 p.m. prevailing Eastern Time. Only ballots actually received by the November 29th deadline will be accepted.

Why should I vote to ACCEPT the plan?

Voyager and its affiliated debtors believe that the sale to FTX US is in the best interest of all stakeholders and, ultimately, is the best possible—and only actionable–transaction available. As such, Voyager and its affiliated debtors urge you to properly and timely submit your ballot, in advance of the November 29th deadline, with a vote to ACCEPT the plan.

How much value will be returned to me?

Under the plan, the purchase price of Voyager’s cryptocurrency by FTX US, other than for VGX, will be determined based on a 20-day historical average at a future point in time. Because of this, the pro rata value each customer receives will be impacted by the price of Voyager’s cryptocurrency portfolio during the 20-day reference period, which has not yet been set.

Value may be returned to customers through a mix of in-kind crypto, USDC, and U.S. dollars, depending on the nature of a customer’s claims, whether and when customers transition to FTX US, and the specific coins supported on the FTX US platform. Only customers who transition to FTX US will be eligible to receive cryptocurrency as part of their plan distribution—customers who do not transition to FTX US will receive their distributions in cash from the Voyager bankruptcy estates. FTX US currently supports tokens that represent about 77 percent of cryptocurrency denominated claims and is seeking to add additional tokens to raise this percentage.

FTX US does not currently support the VGX token. FTX US has offered to purchase all VGX held by Voyager and its affiliates for a purchase price of $10 million. This is the floor price for VGX. Voyager will continue to work internally and with third parties in an effort to identify a higher and better solution for VGX that is also compatible with the FTX US Asset Purchase Agreement. Any such alternative solution, to be acceptable, must deliver value that exceeds $10 million. If Voyager is unable to identify a higher and better solution for VGX, it will accept FTX US’s offer and this $10 million will be added into the purchase price for all of Voyager’s other cryptocurrency, for distribution to customers. VGX may decline in value and may have no value post-consummation of the plan. VGX constitutes a small fraction of the total value expected to be returned to customers.

To help you understand how much value you may receive through the sale to FTX US, an illustrative distribution spreadsheet is available at: https://cases.stretto.com/Voyager/.

You can input the number and type of coins in your account using that spreadsheet, and it will calculate an estimated distribution as if the Voyager portfolio had been sold on September 29th, 2022, adjusted for the size of the total claims pool against Voyager and associated holdbacks.

The U.S. Bankruptcy Code requires that all creditors of the same class receive “equal treatment” so value will be equitably distributed amongst all customers (i.e., no customer can have a higher opportunity to recover on their claim than another customer).

Further, on the 30-day anniversary of closing, those customers who have transitioned to FTX US will also have an additional $50 deposited into their FTX US account if they have executed one cryptocurrency transaction on the FTX US platform, regardless of the size of the trade. This first trade will not be subject to any transaction fee.

Why was FTX US’s bid selected?

After multiple bidding rounds in a highly competitive auction process that lasted two weeks, with active participation from the Official Committee of Unsecured Creditors (UCC), the FTX US bid was selected as the highest and best bid for our assets. FTX US’s bid, which is significantly better for customers than its original bid, was chosen because it maximizes the value returned to you in the shortest time. Ultimately, the deal reached with FTX US pursuant to the auction contains up to $96 million more for customers than FTX US’s original bid.

Does the UCC support FTX US’s bid?

Yes. The UCC participated actively in the competitive auction and supports FTX US’s winning bid, and agrees the plan must be confirmed to ensure that customers receive distributions in the greatest amount and as quickly as possible.

What happens after the voting period ends?

We anticipate the Bankruptcy Court confirming the Plan as soon as early to mid-December. At that point, Voyager and FTX US will move forward with closing the sale and begin the process to return value to customers through their FTX US accounts, and more information will be provided about steps you need to take to open your FTX US account.