The consumers of the now-defunct crypto lending company BlockFi are nearing their repayment. In this respect, a New Jersey-based US Bankruptcy Court approved the liquidation plan that BlockFi submitted for the repayment of the funds to the clients. A Bankruptcy Judge named Michael A. Kaplan authorised the 3rd modified Chapter 11 strategy in a court hearing held on 26 September.
Cryptocurrency Lender BlockFi Receives Approval from the Court to Plan Repayment for Consumers
The amount of funds that BlockFi is going to repay to unsecured creditors depends on its legal achievements. It requires to remain triumphant in the legal fight confronting FTX as well as the rest of the bankrupt crypto platforms. On 28 November, the firm submitted the initial liquidation strategy to the bankruptcy court. However, subsequently, it submitted the 1st, 2nd, and 3rd amendments to the plan on 12 May, 28 June, and 31 July respectively.
The liquidation plan of Blockchain witnessed its approval following the company settled a long-fought clash with the committee of creditors. The dispute dealt with the senior management of the platform. A recent filing discloses that the creditor committee of BlockFi admitted that the settlement potentially became very beneficial.
In this respect, it minimized the extra administrative expenses and charges. The now-defunct lending company accused the collapse of FTX of the failure. Contrarily, the creditor committee referred to the apprehensions related to BlockFi’s connection to FTX and the previous CEO Sam Bankman-Fried.
The Platform Owes Approximately $1B to 3 Biggest Creditors
Assessments indicate that BlockFi owes nearly $10B to more than 100,000 creditors, taking into account $1B to 3 biggest creditors. As included in this amount, the firm owes $220M to Three Arrows Capital (a defunct cryptocurrency hedge fund). The law companies Haynes and Boone LLP and Kirkland & Ellis LLP are responsible for representing BlockFi.
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