Days after seeking a moratorium against creditors, Vauld has found itself cornered as several creditors have “hostile” action against the firm. An affidavit reveals that the Singapore-based crypto lender owes a total of $402 million to its creditors. The creditors have commenced originating claims and issued demand letters to the company.
Only July 4, Vauld suspended client withdrawals because of the financial turmoil brought in by the collapse of Terra’s algorithmic stablecoin UST. The firm applied for a moratorium in the Singapore High Court, on July 8, against the company while it explores its restructuring options. However, the creditors do not support Vauld’s moratorium extension. The troubled firm is seeking a moratorium extension for six months and a hearing for the same has been scheduled for August 1. The court will then decide whether or not to grant Vauld the extension.
Experts say the court’s decision depends on the creditor’s support. It should be noted that Vauld requested creditor support through a Google form and the deadline to submit the form was today (Singapore time). Data shows that 2,910 creditors out of a total of 147,000 submitted their forms. According to the affidavit, 2,280 out of the 2,910 respondents said they are in support of the moratorium extension. But 15%, around 442 respondents, did not take a position. 188 creditors rejected the moratorium. Vauld’s seventh largest creditor who has a claim of $3.5 million, supports the extension. If Vauld does get the extension, it would empower the firm with the necessary time to access various restructuring strategies. This would result in the best possibility of the creditors recovering their respective investments.
Meanwhile, Nexo is looking for a potential Vauld acquisition. It started its due diligence process on July 5 when it signed a term sheet that granted it a 60-day exclusive exploratory period to carry out the procedure. Nexo’s presence is significant as Vauld’s complete acquisition would result in the satisfaction of all liabilities owned by the applicant to its unsecured creditors.