Lawyers representing bankrupt crypto broker Voyager Digital have served former FTX CEO Sam Bankman-Fried and other FTX and Alameda Research executives with subpoenas requesting information.
The subpoenas have a very wide scope, with Voyager’s lawyers seeking copies of any documents and communication between FTX entities and the Securities and Exchange Commission (SEC) or the Department of Justice (DOJ) according to the Feb. 6 filing.
Amongst a plethora of other requested documents, the lawyers also want to see information relating to the loan portfolio between Alameda and Voyager as well as FTX’s financial condition before and after it filed for bankruptcy on Nov. 11, 2022.
The other executives who were served subpoenas include former Alameda CEO, Caroline Ellison, FTX co-founder, Gary Wang and FTX’s head of product, Ramnik Arora – each was asked to provide the requested information by Feb. 17.
Little is known about Wang (left) who co-founded FTX with Bankman-Fried, Ellison (right) has cooperated with authorities since the exchange’s bankruptcy.
The financial ties between Voyager and Alameda are deep, with Alameda seeking to recover $446 million it repaid Voyager. In a Jan. 30 filing, it argued because it had paid Voyager back within 90 days of filing for its own bankruptcy it can “claw back” the funds for the benefit of its creditors.
In response, Voyager claimed its creditors had suffered “substantial harm” after Alameda made a bid for Voyager’s assets that it was unable to honor, which cost Voyager $100 million and rendered Alameda’s claim subordinate to those of its other creditors.
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Meanwhile, United States bankruptcy judge Michael Wiles said he would be appointing a fee examiner to look at professional fees in Voyager’s Chapter 11 case, according to a Feb. 7 Law360 report.
Congrats to Voyager creditors for several victories today
* Appointment of fee examiner
* Judge ordering release of full report
* Scrutiny on $10M transferred on eve of BK to pay legal fees for directors out of creditors pockets https://t.co/NCswHgc7z3
– Shingo Lavine (@shingolavine) February 7, 2023
Wiles reportedly suggested the professional fees incurred within the bankruptcy case were higher than he expected, and the argument provided by the U.S. Trustee had convinced him that a fee examiner would be beneficial.
Wiles did note that an examiner could end up costing the estate more than it would be able to save in other professional fees, however, and recommended a cap was put on the examiners own fees.