BlockFi’s Bankruptcy Plan Moves Forward with Conditional Approval
BlockFi, the bankrupt crypto lender, has received conditional approval from the US Bankruptcy Court for the District of New Jersey for its disclosure statement. This marks a significant step forward in the reorganization process, which has been ongoing for eight months since BlockFi filed for relief under Chapter 11 of the United States Bankruptcy Code.
Key Points:
- BlockFi aims to maximize recoveries for its creditors.
- The conditional approval of the disclosure statement brings BlockFi closer to achieving its goal.
- Clients are urged to vote in favor of the plan.
- BlockFi plans to recover funds from other defunct firms to benefit its clients.
- The bankruptcy plan faces opposition from FTX, 3AC, and the SEC.
If the bankruptcy plan is approved, BlockFi will focus on recovering funds from firms such as Alameda, FTX, 3AC, Emergent, Marex, and Core Scientific. This is to ensure maximum recoveries for clients and to defend against claims by third parties that could dilute clients’ holdings.
However, the proposed plan has faced opposition from FTX, 3AC, and the SEC.
The plan offers clients the option for releases, which would absolve them from any claims or causes of action that BlockFi may have against them. This release is applicable for most clients, except those who withdrew $250,000 or more from BlockFi Interest Accounts (BIA) or BlockFi Private Client (BPC) Accounts on or after November 2, 2022.
The voting on the proposed reorganization is scheduled for September 11.
Hot Take
BlockFi’s conditional approval of its disclosure statement is a positive development in its reorganization process. While facing opposition from various parties, the lender remains committed to maximizing recoveries for its clients. The proposed bankruptcy plan’s success will depend on the upcoming voting, which will determine the next steps for BlockFi’s future. Overall, this news shows that progress is being made, albeit with potential challenges ahead.
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