The committee representing creditors in the Voyager bankruptcy case says it supports the recent sale to FTX, but in a new objection it's taking issue with provisions in the sale plan that would protect executives from being taken to task down the line.
The creditor committee filed an objection last night in response to Voyager's motion for approval of an order that would lay out procedures for its sale process. The creditor committee is concerned about stipulations in the recently filed plan that would effectively release executives from liability.
FTX scooped up the distressed firm's assets for $1.4 billion at the close of last month, bringing the Chapter 11 process into its end game. The court still needs to approve motions related to the deal, and creditors will have to vote on the plan.
Now, the committee is asking the court to include a third option during the voting process that would allow creditors to accept the plan but object to the releases of the estate claims against directors and officers.
The committee's counsel complained in its objection that the current plan deceptively deprives creditors of the ability to push back on the plan, since litigation will be costly on the estate. But the releases in the current version may keep creditors from pursuing funds that could be owed to them by executives.
"This attempt to protect the individuals principally responsible for the Debtors’ financial woes is particularly egregious given that (i) there are colorable and valuable causes of action against these directors and officers, (ii) the releases are extraneous to effectuation of the sale transaction, and (iii) the beneficiaries of the releases are providing the Debtors with no consideration whatsoever in exchange for the releases," the objection said.
It's also asking the court to send a letter ahead of the upcoming Oct. 19 hearing disclosing information about the creditor committee's investigation into executives and a recommendation to creditors on the plan at hand. Information regarding the investigation was redacted from the objection due to a protective order, despite the committee's position that the information is not protected under the bankruptcy code.
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