Vauld seeks another four months of protection against creditors
- Struggling Asian crypto lender Vauld has filed for extended bankruptcy protection, according to court documents seen by The
- The company is seeking time until March 7, 2023 to resolve its financial
Struggling Asian crypto lender Vauld is taking more time to sort out its financial woes as the company filed for another four months of bankruptcy protection, according to court documents obtained by The Block.
The filing, filed Oct. 18 in the Singapore High Court, seeks additional protection until March 7, 2023. Vauld’s existing bankruptcy protection expires in November. The new request comes shortly after Nexo, a Vault rival and potential acquirer, further extended its due diligence period for “as long as necessary,” The Block reported last week.
Vauld claims in court documents that the four-month extension is necessary to avoid litigation while proposing a restructuring plan to its creditors and potential investors. Discussions are still ongoing regarding a possible takeover of Nexo.
“Even if the Nexo deal does not go through, I am confident that there will be another party that would be interested in potential investment in the Vauld platform,” said Darshan Bathija, co-founder and CEO of Vauld. in court records.
“We’ve additionally had support from major creditors that the Defi payments business ‘remains attractive’ and is probably going to receive ‘further takeover bids’.” Defi Payments is Vauld’s Singapore subsidiary involved in the lawsuit. Earlier this month, Vauld formed a creditors’ committee, according to court documents. According to the documents, the committee consists of 17 unnamed creditors of Vauld.
The committee held its first meeting on October 10, along with Vauld’s management team and its financial advisor, Kroll LLC. At the meeting, Vauld discussed, among other things, the preliminary terms of its restructuring plan and concluded that should Vauld liquidate, the estimated bailouts are likely to be between 38% and 49%.
But Vauld said that “a possible outcome of a settlement with Nexo is that creditors may recover 100% of their claims. Vauld is also considering converting its assets into a fund managed by a third-party professional crypto-asset fund.” is managed.”
Recoveries under this restructuring proposal would depend on the fund’s performance, but according to court documents, “it’s possible that repayments to creditors could exceed 100, depending on the fund’s performance.” Vauld’s creditors’ committee appears to support a four-month extension, according to court records. If granted, Vauld will be given additional leeway to complete a restructuring plan or could be liquidated.
Vauld halted customer withdrawals in July and owes $402 million to creditors, with $363 million, or 90% of that amount, coming from retail deposits. Vauld has not responded to The Block’s request for comment at press time.