Bankrupt cryptocurrency lender BlockFi has withdrawn statements relating to a wind-down strategy published May 13 following an order from a Unitedย States bankruptcy court, court filings show.
The estate was required toย makeย available a โcorrective letterโ explaining that the documents were posted prematurely and without court approval, an emergency order announced May 18 by New Jersey Bankruptcy Court Judge Michael B. Kaplan said.
The documents in question hasย stated some $1 Billion in states against commercial counterparts like collapsed cryptocurrency exchange FTXย Tradingย Ltd and its trading arm Alamedaย Research will be the โ largest driverโ in the success of getting creditors their money back. โThe purpose of the disclosure statement is to provide clients with the information that theyย must to make an notified decision about whether to vote to accept our plan,โ the company tweeted at the time.
The BlockFi estate has been at odds with its creditors after filing for bankruptcy in November, with the latter blaming the firmโs poor management and subsequent restructuring plans for its demise as recently as May 15.
The court-ordered letter โ which BlockFi issuedย on its official Twitter account on Friday โ reveals it has isย still to approve the estateโs โ capacity to solicit acceptances of its plan.โ
โA disclosure statement must be approved by the Court before any party may lawfully promoteย ย you to accept or reject any strategy of reorganization,โ the letter said.
The creditors and other parties doย not support the reorganization strategy, the corrective letter stated. The Official Committee of Unsecured Creditors โ thinksย that the strategy provides releases of litigation states against, between others, current and previous directors and officers of BlockFi that committed wholeย lotย of misconduct that harmed BlockFi and its customers.โ
Theย following date for the bankruptcy hearing is set for June 20.
Sheldon Reback.
