Robert Gronkowski, Oladipo, and Cassill settle Voyager case

A Florida judge has granted preliminary approval for a legal settlement involving three sports stars who agreed to pay more than $2.4 million in monetary relief over claims they promoted bankrupt crypto lender Voyager Digital.

In a June 10 filing in the United States District Court for the Southern District of Florida, Judge Roy Altman approved the preliminary settlement involving NFL star Robert Gronkowski, NBA player Victor Oladipo, and NASCAR driver Landon Cassill. The athletes’ lawyers announced in May that they had collectively agreed to the settlement, with Gronkowski alone contributing $1.9 million.

The class-action lawsuit was initially filed against former Dallas Mavericks owner Mark Cuban in 2022. It accused the billionaire of misrepresenting Voyager’s services, leading inexperienced investors to lose money when the firm filed for bankruptcy. The proposed settlement, if given final approval, would resolve the claims against Gronkowski, Oladipo, and Cassill but not against Cuban or the Mavericks.

The civil lawsuit is separate from other legal proceedings involving Voyager debtors since 2022. The firm has been in bankruptcy court and has faced claims related to funds at Three Arrows Capital and the defunct crypto exchange FTX.

Further complications arose in October 2023 when the U.S. Commodity Futures Trading Commission and the Federal Trade Commission (FTC) filed lawsuits against Voyager’s former CEO, Stephen Ehrlich, alleging fraudulent statements. The settlement with FTX, inclusive of interest, is expected to cover about 25% of the total claims made by Voyager’s creditors, with distributions slated to start shortly.

Meanwhile, Voyager has claimed $675 million in its ongoing litigation with Three Arrows Capital, with an initial distribution of $20.43 million representing Voyager’s share. The company anticipates future payments as assets are liquidated and additional settlement agreements are reached. A D&O insurance mediation settlement is also set to contribute at least $14.35 million to the creditor repayment efforts.

Despite these advances, Voyager continues to face operational challenges, including a massive number of uncashed checks. The company reported that around 270,000 checks, totaling $17 million and predominantly valued at less than $25, have yet to be cashed. A deadline of April 20 has been set for these checks to be claimed before they are voided.

Voyager is also addressing issues stemming from an FTX data breach, with an investigation underway to ascertain the breach’s origins and implications, which compromised creditor data.

As of May 2023, Voyager proposed a restructuring plan allowing customers to recover 35.7% of their claims in cryptocurrency or cash. Additionally, the crypto exchange reached a settlement with the FTC in November 2023, agreeing to $1.65 billion in monetary relief.