Voyager Digital’s Creditor Asked For A New Trustee Due To Fraud Concerns

Key Points:

• A Voyager Digital creditor requested the appointment of a Chapter 11 trustee in the bankruptcy case of cryptocurrency brokerage Voyager Digital.
• The filing said Voyager published financial reports that grossly misrepresented its loan holdings by more than $1 billion, concealing the actual nature of its lending activities.

A Voyager creditor and finance lawyer are requesting the appointment of a Chapter 11 trustee in the bankruptcy case of cryptocurrency brokerage Voyager Digital.

Voyager creditor Michelle DiVita charged the company with having a history of financial statement errors and public misrepresentations that were known or reasonably discoverable at the start of the bankruptcy action in a document filed on February 1.

According to the complaint, Voyager Digital published financial reports that grossly misrepresented its loan holdings by more than $1 billion, concealing the actual nature of its lending activities.

DiVita feels that an examiner or trustee should have been asked due to this pre-bankruptcy behavior and is currently doing so herself, which would result in Voyager losing control of its estate.

In a long Twitter thread from February 1, Shigo Lavine, a former director and chief investment officer at Voyager, highlighted some of the main allegations contained in the petition.

The complaint states that cryptocurrency exchange Coinbase was also made aware of Voyager’s financial reporting irregularities and that it subsequently pulled out of an agreement to buy Voyager’s assets after discovering the financial irregularities.

A United States trustee is already involved in the bankruptcy proceedings and is required to file a motion to appoint a Chapter 11 trustee.

The U.S. trustee may appoint a bankruptcy trustee to oversee the debtor’s activities if the debtors are not permitted to do so themselves, in addition to performing other obligations such as appointing a creditors committee and reviewing requests for professional remuneration.

Voyager and its creditors previously resisted an attempt by insolvent trading company Alameda Research to recoup $446 million in loan repayments.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Harold

Coincu News