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Exploring the Mysterious Depths of The Vauld - Communication Email

Vauld company owes its creditors a total of around USD 325 million in cryptocurrency, which is referred to as "liabilities". However, the company also has assets in the form of third-party on-chain custody (USD 115 million) and expected receipts from three counterparties (USD 186 million). These assets are referred to as "liquid assets" and "illiquid assets", respectively.

The communication then goes on to explain the proposal. The plan is to pay back all net liquid assets to creditors as soon as possible, and to take steps to collect all illiquid assets via legal means, and then pay them back to creditors as well. The funds will be distributed through a process known as RDAs (Reverse Dutch Auctions), which allows creditors to bid for a higher percentage of their claim in exchange for giving up their future claims. The funds will also be distributed equally to all creditors based on their percentage claim.

The communication then highlights the benefits and risks of participating in the RDA process. The benefits include the possibility of receiving up to 55% of the claim in USD terms by September 2023, guaranteed if the bid is submitted and accepted. The risks include the fact that there is an upper ceiling to recovery (i.e., the maximum amount that can be received is 55% in USD terms).

The communication also explains that creditors who choose not to participate in the RDA process will receive between 28% and 41% of their total claims back, depending on the average RDA bids that are submitted. Furthermore, since some creditors will exit the process through the RDA takeup and give up their remaining claim against the company, the percentage share of any assets recovered later on will be higher for creditors who do not participate in the RDA process.

The communication ends by summarizing the pros and cons of the RDA and non-RDA options, and highlighting the risks associated with the recovery of illiquid assets. Overall, the communication provides a clear and concise summary of the proposed restructuring plan and the risks and benefits associated with it.




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