A shouting match broke out betwixt the judge and a creditor within a lengthy and contentious Voyager bankruptcy hearing on Thursday on the broker’s proposed investment sale to Binance.US, but regardless of eight hours of testimony, Judge Michael Wiles did not rule on the restructuring agreement. Instead, the hearing will spill over into Friday in the United States Bankruptcy Court for the Southern District of New York.
The restructuring strategy was approved by 97 percent of creditors who voted on the matter, lawyers stated, although only 6 percent of Voyager’s creditors essentially voted. Greater than 167,000 Voyager customers —representing $1.2 Billion in customer states — already have signed up for the Binance. United States platform, reports by a lawyer for the Voyager debtors.
The Securities and Exchange Commission and New York regulatory authorities are between those objecting to the Binance. United States restructuring plan.
Wiles pressed the SEC on its objection, saying he was “shocked” the regulating authority hadn’t provided more evidence to the court.
“I’m shocked a regulating authority would come in and say ‘I’m charged with regulatory authority over these things. These are reasons that I have concerns because they’re within my regulatory jurisdiction, but I’ve done nothing, I have nothing to offer to you except questions,’” Wiles stated. “That’s incredible.”
Under the proposed sale, lawyers for the Voyager debtors stated customers are expected to receive a 73 percent recovery. That percentage would fall to 48 percent if states from bankrupt cryptocurrency exchange FTX Trading Ltd and its sibling company Alameda Research are successful.
Voyager has agreed to reserve $445 Million after Alameda Research sued the defunct broker for loan repayments. The stipulation is subject to court approval.
Contemptuous creditor
Although while lawyers and a number of individual creditors cross-examined two witnesses during the hearing, Berkeley Research Group Managing Director Mark Renzi and Timothy Pohl, an independent director of Voyager Digital LLC, commotion broke out in the courtroom.
An outburst by creditor Alah Shehadeh forced Wiles to pause the hearing and call out the man’s “contemptuous conduct” and “refusal to listen to ordinary court rules.” Wiles stopped the creditor from questioning a witness because Shehadeh had already requested questions earlier in the hearing. Shehadeh interrupted Wiles and was known him a “terrible judge.”
“You have forfeited any right to engage in this proceeding,” Wiles stated “Both by your contemptuous conduct, your refusal to listen to ordinary court regulations and the fact that you continue to desire to treat this as a podium for you to scream about your grievances.”
Shahedeh requested Wiles to “please, please, please” allow him to remain in the hearing, but he was removed.
Throughout the hearing, Wiles urged creditors, who sometimes strayed from the topic at hand and expressed frustration about Voyager’s circumstances, to keep their questions focused on the court agenda.
“It’s not an open mic. It’s not a town hall. It’s not a gripe session. It’s not a radio call-in show for sports news or cryptocurrency news,” Wiles stated. “We are where we are. We can’t undo the past.”
Disclosure: The previous CEO and majority shareholder of The Block has disclosed a series of loans from previous FTX Trading Ltd and Alameda Research founder Sam Bankman-Fried
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