BlockFi Inches Closer to Settlement in Bankruptcy Court Win
BlockFin has received conditional approval for a disclosure statement from the United States Bankruptcy Court for the District of New Jersey, a report reveals. The firm, which filed for bankruptcy in November 2022, says the approval forms part of its Chapter 11 plans as it inches closer to the settlement of its debts.
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According to Mark Renzi, BlockFi’s chief restructuring officer, the disclosure statement moves the company closer to its Chapter 11 goals. He added further that the plan set out highlights the best way to quickly return clients’ assets back to them.
The plan, which was recommended by both BlockFi and the Official Committee of Unsecured Creditors, is set to maximize the recovery of funds for clients and ensure quick distribution of debts. Likewise, the firm believes the plan will help bring its Chapter 11 cases to a fair conclusion.
The plan, which was recommended by both BlockFi and the Official Committee of Unsecured Creditors, is set to maximize the recovery of funds for clients and ensure quick distribution of debts. Likewise, the firm believes the plan will help bring its Chapter 11 cases to a fair conclusion.
Additionally, the plan details the return of digital assets held in BlockFi accounts before it stopped withdrawals. Similarly, it makes provisions for the return of non-wallet assets to creditors. The plan also provides for the winding up of the company’s affairs.
Notably, BlockFi will not claw back amounts under $250,000 properly transferred to the platform before it paused withdrawals on November. Further, clients with claims under $3,000 are included in a Convenience Claim Cases class. Clients in this category are entitled to a one-time payment of 50% of their claim in cash from the BlockFi Estate.
A voting deadline has been set for September 11, 2023, before which all entitled parties are expected to have voted. All BlockFi creditors are eligible to participate in this voting process, to either vote for or against the plans. Additionally, BlockFi says if the plans are approved, it plans to pursue claims and actions against several entities, including Alameda, FTX, 3AC, Emergent Marex, and Core Scientific. The outcome of these actions will determine if the firm will be able to settle all its debts.
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