A conditional approval for BlockFi’s disclosure statement
BlockFi, a cryptocurrency lender, has received conditional approval from a U.S. bankruptcy court in New Jersey for its disclosure statement. This is a significant step in the company’s reorganization process, aimed at maximizing recoveries for its creditors. BlockFi’s Chief Restructuring Officer, Mark Renzi, expressed confidence in their plan, stating that it provides the best path to return crypto assets to clients. However, the proposed bankruptcy plan has faced objections from FTX, Three Arrows Capital (3AC), and the Securities and Exchange Commission (SEC), who argue that it unfairly downgrades their claims and lacks procedural fairness. The liquidator of 3AC has also announced plans to reclaim $220 million in preferential payments. The deadline for voting on the proposed reorganization is September 11.
Key Points:
- BlockFi’s disclosure statement has been conditionally approved by a U.S. bankruptcy court in New Jersey.
- The approval is a step closer to maximizing recoveries for the company’s creditors.
- BlockFi urges its clients to vote in favor of the proposed bankruptcy plan.
- FTX, 3AC, and the SEC have objected to BlockFi’s plan, citing unfair treatment and lack of procedural fairness.
- The liquidator of 3AC plans to claw back $220 million in preferential payments to BlockFi.
Hot Take
BlockFi’s conditional approval for its disclosure statement is a positive development in its reorganization process. However, the objections from FTX, 3AC, and the SEC highlight potential complications and disagreements in the plan. The outcome of the voting on the proposed reorganization will be crucial in determining the path forward for BlockFi. It remains to be seen how the company will address the concerns raised by its critics and navigate through the disputed transactions. The deadline for voting on the plan adds further urgency to the situation, making it a critical time for BlockFi and its clients.
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