Voyager Digital urges court to dismiss the lawsuit against Mark Cuban

Troubled cryptocurrency brokerage service provider Voyager Digital, which is presently going through bankruptcy proceedings, has petitioned the bankruptcy court to put an end to a lawsuit brought by investors against the company’s founder and CEO, Stephen Ehrlich, and the founder of the Dallas Mavericks, Mark Cuban.

According to the report, the defense claims that Ehrlich and Cuban are connected to a similar lawsuit brought by the same plaintiffs against Voyager. Notably, the lawsuits brought against businesses in bankruptcy are immediately stayed, which means declaring bankruptcy halts many legal procedures, including lawsuits brought for debt collection.

However, third parties, such as company leaders, are exempted from this. Nonetheless, there is a chance of bankruptcy judges agreeing to extend the temporary protection to others involved with the firm.

The development occurred two weeks after a class action lawsuit was submitted in the Southern District of Florida US District Court against Cuban, the Dallas Mavericks, and Steven Ehrlich, CEO of Voyager Digital.

The 12 primary plaintiffs claimed that by repeatedly endorsing Voyager Digital and going to “great lengths to use their experience as investors to dupe millions of Americans,” Shark Tank celebrity preyed on “young and inexperienced fans” into investing a sizeable portion of their savings in the company.

Cuban allegedly misled plaintiffs by promoting Voyager

They asserted that the Cuban misled the plaintiffs about any hidden commissions on cryptocurrency trades executed through Voyager. According to court documents, the lender’s eligibility for Federal Reserve and Federal Deposit Insurance Corporation (FDIC) insurance is also under doubt.

Cuban is also charged with speaking at a Dallas Mavericks press conference when he is said to have expressed his firm support for the alliance between the Voyager defendants and his company. They emphasized that the billionaire businessman “proudly described how he would personally help significantly increase scope and presence of the Deceptive Voyager Platform for those with limited funds and experience.”

In its bankruptcy filing, Voyager Digital blamed “prolonged volatility and contagion in the crypto markets” in addition to 3AC’s failure on a loan from the business’s subsidiary.