The Legal Troubles of Alexander Kassan Amid Voyager Digital’s Bankruptcy
Alexander Kassan, the son of renowned MediaLink founder Michael Kassan, has recently been embroiled in a federal lawsuit concerning cryptocurrency transactions that occurred prior to the bankruptcy of Voyager Digital Holdings, a prominent cryptocurrency brokerage. The lawsuit, which sought to reclaim around $800,000 from Alexander, was dismissed earlier this week. This case is notable amid nearly a hundred similar lawsuits directed at Voyager users, highlighting the increasing legal and financial complexities associated with cryptocurrency in the context of corporate bankruptcies.
Understanding the Voyager Digital Lawsuit
In 2022, Voyager Digital Holdings declared bankruptcy, prompting a series of recovery efforts aimed at reclaiming assets that had been allocated to creditors shortly before the company’s downfall. These recovery initiatives, known as preference actions, sought to recoup funds transferred within the 90 days leading up to Voyager’s bankruptcy filing. Alexander Kassan’s situation was one among many pursued by Voyager’s bankruptcy administrator, aiming to return specific funds to creditors proportionally. Legal documents reveal that Voyager accused Alexander of executing multiple withdrawals or sales of cryptocurrency right before the bankruptcy declaration. During this critical “Preference Period,” Voyager transferred $798,383.97 to Alexander’s account, making him a target in the company’s recovery strategy. In May 2024, the trustee appointed by Voyager’s bankruptcy administrator sent a demand letter to Alexander, requesting the return of what they classified as “Avoidable Transfers” while also seeking additional information to substantiate any potential defenses Alexander might present under Section 547(c) of the Bankruptcy Code. This section allows certain transactions to be recognized as “new value,” potentially offsetting the amount a defendant owes. The demand letter also proposed a discounted settlement option to expedite the resolution of the matter before formal legal actions commenced.
Voluntary Dismissal of the Case
On October 31, the lawsuit against Alexander was voluntarily dismissed, concluding the legal proceedings without any ruling or acknowledgment of wrongdoing. Alexander’s attorney, Deborah Kovsky-App, remarked that “this matter has been fully resolved, and the lawsuit has been dismissed.” She explained that preference actions are a common part of most bankruptcy cases, where trustees have the authority to recover any transfers made by a debtor to creditors within 90 days prior to the bankruptcy filing and redistribute those assets among all creditors. Kovsky-App emphasized that these lawsuits do not imply any misconduct by the creditor but are a part of the legal framework designed to return assets to creditors. She noted that Alexander’s case was similar to over 100 other preference claims Voyager initiated against its users, who were merely customers executing transactions before the bankruptcy.
Voyager’s Broader Legal Issues and FTC Settlement
The bankruptcy of Voyager Digital set off a cascade of financial and regulatory actions, including scrutiny from the Federal Trade Commission (FTC). The FTC accused Voyager of misrepresenting the safety of customer funds, which ultimately left consumers unable to access their accounts following the collapse. In October 2023, Voyager reached an agreement with the FTC, committing to cease managing consumer assets permanently. The FTC’s actions highlight ongoing issues within the cryptocurrency sector, where misleading claims about security have resulted in significant financial losses for consumers. Voyager’s settlement serves as a crucial reminder of the consumer protection challenges faced by regulators in the rapidly changing cryptocurrency landscape.
Michael Kassan’s Ongoing Legal Dispute with United Talent Agency
While Alexander’s legal issues have been resolved, Michael Kassan is still involved in a significant lawsuit against the United Talent Agency (UTA). Kassan, a key figure in the media industry and founder of MediaLink, sold his company to UTA in 2021 for $125 million, under the premise that he would retain a senior role. However, the relationship soured, leading to lawsuits from both parties. Kassan claims he was misled regarding his position and entitlements following the sale, while UTA has countersued, alleging that he misappropriated company funds for personal expenses. Recent developments in Kassan’s lawsuit have included accusations of embezzlement against UTA. His attorney, Sanford Michelman, stated, “Jeremy Zimmer [UTA’s CEO] fraudulently enticed Michael Kassan into selling MediaLink. Following Zimmer and UTA’s breach of contract, Michael chose to resign, foregoing a $10 million payout to pursue competition.” Michelman further alleged that Kassan claims UTA embezzled $300,000 from him, resulting in another lawsuit against the agency. In response, UTA’s attorney, Bryan Freedman, criticized Kassan’s attempts to shift the narrative, asserting that Kassan misappropriated significant funds that he knew belonged to the company.
A History of Legal and Financial Struggles
Michael Kassan’s legal issues are not a recent phenomenon. His history is marked by multiple lawsuits dating back to the 1990s, with several judgments against him and notable financial disputes. In 1995, he was ordered to pay $158,000 to American Express Travel, and two years later, a case involving Bell Atlantic Mobile Systems resulted in a $51,000 judgment against him. That same year, the United Merchants Association secured a $43,000 judgment against him. Reports indicate that Kassan has encountered further legal challenges in recent times. In 2021, UTA accused him of utilizing agency funds for personal expenditures, likening his actions to using UTA as a “personal slush fund,” with expenses including luxury travel and designer items. His financial troubles have been compounded by a federal tax lien of $3.3 million against his property, as reported by The Ankler.
Reflection on Past Actions
Kassan has acknowledged certain past decisions and expressed regret over them. He admitted that in the 1990s, he made a poor business decision by reallocating funds from successful restaurants to support failing ones, including El Pollo Loco. While he recognizes that his actions were misguided, he insists that he did not gain any personal benefit from these transactions. Kassan stated, “I was able to maintain my law license because I never profited personally from those actions. Additionally, I was involved in other legal matters related to El Pollo Loco, which involved myself and others concerning associated financial agreements.” He also pointed out that although these incidents occurred long before he founded MediaLink, he has since settled many disputes and reconciled with several parties involved.
The dismissal of Alexander Kassan’s case marks the conclusion of a complex legal scenario and adds to the increasing number of preference actions in cryptocurrency bankruptcies. While Alexander’s situation reflects the unique challenges present in the crypto space, his father, Michael Kassan’s ongoing legal conflicts illustrate the intensity of corporate disputes within the media and business sectors. As the cryptocurrency industry continues navigating regulatory frameworks and the repercussions of bankruptcy filings, cases like Alexander’s highlight the intricate legal landscape faced by creditors and consumers. Concurrently, Michael Kassan’s ongoing litigation with UTA and his history of financial challenges underscore the unpredictable nature of significant figures in the media and entrepreneurial fields.
