Binance.US Faces Legal Challenge From Texas Over Restructuring And Terms
- Texas objects to Voyager Digital Ltd. and Binance.us’s proposed deal, citing inadequate disclosure statements and insufficient information for general unsecured creditors.
- Texas argues that holding assets for six months, post-confirmation serves no purpose. The plan’s releases and injunctions are a disguised discharge, not allowed under the Bankruptcy Code.
In a recent court filing, Texas has raised objections to the proposed deal between Voyager Digital Ltd. and Binance.us. The state argues that the disclosure statement is inadequate and that the plan cannot be confirmed as sufficient information has not been provided to inform general unsecured creditors of the potential decrease in their recovery, should Alameda prove its administrative expense claim.
The plan also discriminates unfairly against Texas consumers by holding their assets for six months post-confirmation. Texas argues that holding the assets serves no purpose as it will be almost impossible for Binance.us to be licensed by the Texas SSB and the DOB within six months.
Finally, Texas argues that the releases and injunctions provided for in the plan are nothing more than a disguised discharge, something that the Debtors are not allowed under 11 U.S.C. § 1141(d)(3) of the Bankruptcy Code and should not be approved.
The objection by Texas to the proposed deal between Voyager Digital Ltd. and Binance.us raises significant concerns about the adequacy of information provided to creditors and the potential risks associated with using Binance.us services. The objection also highlights the unfair treatment of Texas consumers under the proposed plan and the potential for Binance.us to gain access to their personal information without adequate regulatory oversight.
Texas has argued that holding the assets serves no purpose and that the releases and injunctions provided for in the plan are nothing more than a disguised discharge, which is not allowed under the Bankruptcy Code.
These objections raise serious questions about the viability of the proposed deal and the potential risks to creditors and consumers. As the case progresses, it will be interesting to see how these objections are addressed and whether the proposed deal can be approved.
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