Options in layman terms

PLEASE DO NOT ADVOCATE FOR A PARTICULAR OPTION. THIS THREAD AIMS TO BE A CONSOLIDATED RESOURCE FOR SIMPLY CLARIFYING THE AVAILABLE OPTIONS. THIS IS FREQUENTLY EDITED TO CORRECT DETAILS BASED ON COMMENTS. THIS IS JUST ME TRYING TO HELP THE COMMUNITY. I'M NOT A LAWYER. DYOR.

RESOURCES

KROLL SCHEME WEBSITE: https://is.kroll.com

NOTICE OF SCHEME MEETING: https://is.kroll.com/wp-content/uploads/2023/04/0-2023.04.28-Notice-of-Scheme-Meeting-Final.pdf

ORDER OF COURT: https://is.kroll.com/wp-content/uploads/2023/04/1-2023.04.25-Order-of-Court-HC_ORC-1946_2023.pdf

SCHEME OF ARRANGEMENT: https://is.kroll.com/wp-content/uploads/2023/04/2-2023.04.28-Scheme-of-Arrangement-Final.pdf

EXPLANATORY STATEMENT: https://is.kroll.com/wp-content/uploads/2023/04/3-2023.04.28-Explanatory-Statement-Final-w-appendices.pdf

SCHEME PROTOCOL: https://is.kroll.com/wp-content/uploads/2023/04/4-2023.04.28-Scheme-Protocol-Final.pdf

DATES

VOTING MEETING FOR SCHEME CONSIDERATION: MAY 11, 2023 AT 9:30 PM SGT (That's 8:30 AM CST in USA) ON YOUTUBE (No link yet)

VOTING WINDOW: MAY 24, 2023 AT 5:00 PM SGT (4:00 AM CST) TO MAY 31, 2023 AT 5:00 PM SGT (4:00 AM CST)

TIMING

SCHEME ACCEPTANCE: The Effective Scheme Date is determined by 3 conditions which must ALL happen to come into effect:

  • Approval of the Scheme by the requisite statutory majority
  • Approval of the Scheme by the Court
  • Lodgement of the Order of Court sanctioning the Scheme with the Registrar

RDA TIMING: 20 business days after the Effective Scheme Date. From 9:00 AM to 5:00 PM SGT (That's 8:00 PM THE PREVIOUS NIGHT to 4:00 AM CST in USA - They are ahead of us on the clock.)

FIRST DISTRIBUTION: 1 calendar month after the RDA.

VOTING AND PAYOUT

HOW TO VOTE: Voting will be done electronically. Creditors will be provided with a link to the Voting Form and a set of unique login credentials via email. Vauld is explicit that each creditor gets one vote regardless of how many different accounts you may possess and that duplicate voting will nullify all those votes regardless of what you voted for. 1 creditor = 1 vote

PAYOUT NOTES: Any time there is to be a payout, you get a one time chance to elect your form of disbursement (at current market price against the dollar value of your payout) between BTC, ETH, XRP or USDC. These are the only 4 options supported for payout. Those coins become able to be withdrawn from the Vauld app just as it was done before they suspended trading, so assume that gas fees will still apply. If by the "Final Distribution" (See Option 3) you have not withdrawn your tokens from the platform, you will surrender them and they will be divided proportionately to remaining creditors.

PAYOUT VALUE: Claims are locked in as calculated in USD as of July 4, 2022. Therefore Vauld does not owe you the same number of coins back that you had locked on the platform. They owe you the USD value of those assets as of when they suspended trading. Don't confuse this with the fact that we are getting paid back in the form of coins.

For instance, let's say that as of July 4, 2022 BTC was at $50,000 and you had 1 BTC on Vauld. Now, BTC trades at $25,000. You would get back $50,000 worth of BTC, therefore you would receive 2 BTC, not just the 1 you had at the time. Same goes in the other direction if the price went up. If BTC was trading at $25,000 at the time they suspended trading and you had 1 BTC on Vauld, and now the price is trading at $50,000, you would receive $25,000 in BTC, therefore 0.5 BTC, even though you originally had a full coin locked on the platform.

VOTING + RDA OPTIONS

OPTION 1: Vote "NO" on the scheme. This means that the court enters into either restructuring or liquidation but is not entirely determined. I have seen timelines and costs on this point debated but it seems the common wisdom is that it is not going to be a very expedient process. If you have some reliable and clear insight on this please comment below.

OPTION 2: Vote "YES" on the scheme and participate in the initial RDA. In an attempt to get some money out in the fastest way possible, enter a bid to receive between 30.00%-55.00% (to an accuracy of 2 decimal places) of your claimed coins. By participating in the RDA, you surrender the rest of your claim and exit as a creditor of Vauld, so the terms of the rest of the scheme do not apply to you. The RDA pays out bids in order of highest discount first, regardless of payout size until the RDA pool of $50,000,000 is depleted. Matching bids are tie broken by the bid's time stamp. If the RDA pool is depleted before reaching your bid, it is the same as not participating and you fall into Option 3.

OPTION 3: Vote "YES" on the scheme without participating in the initial RDA. This is where the actual implications of the scheme kick in long term. Vauld would attempt to reclaim some of their illiquid assets such as loans from other counterparties to pass on to creditors to fulfill more of their claims by either holding future RDAs or outright distributing to creditors proportionately. 1 month after the initial RDA, remaining creditors will be paid out proportionately from the remaining liquid assets in a "First Distribution". Vauld/Kroll say that the First Distribution is expected to be 28%-41% of creditor claims. After this, Vauld would have to decide between holding an RDA or distributing outright every 6 months after the scheme is implemented or when they recover $10,000,000. The scheme gives Vauld 36 months to pursue recovering illiquid assets and a "Final Distribution" will have to happen before or at that time unless the board unaninously agrees to give itself more time. 2 months after scheme implementation, Vauld will boot up a new subsidiary that will attempt to earn money for creditors through defi trading and issuing their own token, basically Vauld 2.0. The CEO (Darshan) and CTO (Sunaj) will be removed from the board and replaced. There are very wide provisions for the company to change the terms of the scheme if the entire board unanimously agrees to it. This may seem like a high threshold but most board votes in most companies are unanimous, meaning this is a very weak safeguard from the terms changing at any time.