The District Court of the Southern District of New York declined the United States government’s reasonings for halting the acquisition of bankrupt brokerage company Voyager by Binance.US. According to Judge Michael Wiles, any protractions with the deal will harm the interests of Voyager’s former clients, who are waiting to return their funds.
The decision to deny the government’s motion came on March 15. In it, Judge Michael Wiles realleges his prior approval of Voyager Digital’s Chapter 11 bankruptcy plan, which suggests selling billions of dollars in assets to Binance.US in an effort to regain liquidity to pay back customers.
Thus, the Court denied the government’s appeal for a stay of the Confirmation order, i.e. an additional delay (in this case, for two weeks) of the bankruptcy plan realization. The appeal, filed on March 14, accused the bankruptcy plan of “immunizing fraud, theft or tax avoidance.” It has also demanded to remove the provision, preventing the U.S. authorities from legally pursuing anyone involved with the sale.
Judge Wiles counted these accusations as exaggerating and mischaracterizing” and ruled to continue with the bankruptcy plan. He, however, confirmed the duration of the current stay, which ends on March 20.
The court’s approval for Binance.US – Voyager acquisition was granted on March 7. Judge Wiles permitted the trading platform to close the Binance.US sale and issue repayment tokens to impacted Voyager customers. He rejected a series of arguments by the Securities Exchange Commission that the redistribution of the funds from Voyager to Binance.US would violate U.S. securities laws.
The decision came after 97% of 61,300 Voyager account holders were found to favor the restructuring plan. Based on the latest estimates, the plan is expected to result in Voyager creditors recovering approximately 73% of the value of their funds.