Promising news as creditors of Digital Surge vote to keep the company trading
Creditors of cryptocurrency platform Digital Surge have voted up a deed of company arrangement (DOCA) that will allow the company to continue to trade and resolve the claims of its creditors.
The DOCA, proposed by Digital Surge founders Josh Lehman and Daniel Rutter, and recommended to creditors by administrators Korda Mentha, provides:
- Customers and unsecured trade creditors will receive an estimated 55 per cent of the Australian dollar value of their claim at 8 December 2022 and be able to access this amount on the Digital Surge platform within the next few months.
- Customers will be repaid in cryptocurrency and fiat currency, depending on the asset composition of their individual claims. The exact value of this amount will depend on the value of the total pool of cryptocurrencies on the date creditors are repaid. This means if cryptocurrency prices rise, there will be a greater percentage return as compared to creditors’ claims at 8 December 2022, the date the company entered voluntary administration.
- A distribution of the balance of customer claims will be paid on a pari passu (every creditor on an equal footing) basis over the next five years out of the quarterly net profits of Digital Surge.
- A creditors’ trust will be created to facilitate the distribution of these payments to unsecured creditors. These payments will be made in fiat currency only. The administrators will be appointed trustees of the creditors’ trust to oversee the orderly distribution of trust funds to creditor beneficiaries.
Administrator David Johnstone of Korda Mentha said the DOCA was in the creditors’ best interests and provided a superior return and more certainty, compared to Digital Surge being immediately wound up and placed into liquidation.