• BlockFi, a bankrupt crypto lender, recently revealed that the US Bankruptcy Court for the District of New Jersey has conditionally approved its disclosure statement.
• The approval marks an important step towards their reorganization process which was initiated almost 8 months ago.
• BlockFi’s Chief Restructuring Officer highlighted their aim to maximize recoveries for their creditors and urged them to vote in favor of the bankruptcy plan.
BlockFi’s Reorganization Process
BlockFi, a bankrupt crypto lender, recently revealed that the US Bankruptcy Court for the District of New Jersey has conditionally approved its disclosure statement. This development marks an important step towards their reorganization process which was initiated almost 8 months ago by filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.
Aim To Maximize Creditors Recoveries
Mark Renzi – BlockFi’s Chief Restructuring Officer, highlighted the lender’s aim to maximize recoveries for its creditors when he said that the conditional approval of its Disclosure Statement moves BlockFi “one step closer to accomplishing that goal.” He also urged BlockFi’s clients to vote in favor of it as they believe it provides “the best path to expeditiously return crypto back to our clients.“
Recover Funds From Other Defunct Firms
If bankruptcy plan is approved, BlockFi plans to focus on recovering funds from other defunct firms, including Alameda, FTX, 3AC, Emergent, Marex and Core Scientific in order to „maximize recoveries for clients and defending against claims by third parties which threaten to massively dilute clients.“
Opposition From FTX
The proposed bankruptcy plans have met with strict opposition from FTX – a disgraced crypto exchange – and fallen hedge fund Three Arrows Capital who are reportedly opposed due their disagreement on how much money is owed by Blockfi.
Committe Of Unsecured Creditors Backs Proposal
However despite this opposition The Official Committee of Unsecured Creditors (UCC) have backed Blockfi’s proposal as they believe it will benefit all creditors involved in this case and provide them with maximum recovery options.