Voyager Digital won’t sue its executives for incompetence, will claim insurance on them
Voyager Digital has preferred not sue its top executives for incompetence, in spite of their role in approving a huge loan to Three Arrows Capital (3AC) without adequate due diligence. That loan was a key element leading to Voyager Digital’s bankruptcy. Court papers filed Oct. 17 show that a Voyager Digital internal special committee has proposed that CEO Stephen Ehrlich and chief commercial officer (formerly chief financial officer) Evan Psaropolous keep their jobs and not be sued.
The court filing describes the due diligence process for the 3AC loan:
The committee did not find any evidence of fraud in the executives’ actions. According to the court filing, Ehrlich and Psaropolous are “making additional contributions to the [Reorganization] Plan pursuant to the settlements reached with the Special Committee.” According to Bloomberg, Ehrlich will pay the company $1.125 million in cash under the committee’s proposal, which is subject to approval by the bankruptcy judge. The company has $20 million in directors and officers liability insurance to make claims against as well.
Y'all. Voyager Digital filed an amended disclosure statement today in its chapter 11 bankruptcy case and its disclosure about 3AC is F*CKING bonkers. pic.twitter.com/zxYFmouerS
Crypto exchange Voyager Digital made an unsecured loan of 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) to Singaporean crypto hedge fund 3AC in March with the approval of Ehrlich and Psaropolous. When 3AC was unable to repay the loan in late June, Voyager Digital issued the firm a notice of default. 3AC was forced into liquidation by the Voyager Digital action on June 27. Voyager Digital first cut withdrawal amounts and then froze trading, deposits, withdrawals and rewards
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