Blockfi Announces Self-Liquidation Plan After Failed Attempts to Sell Company – Bitcoin News
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The now-defunct crypto lender Blockfi has recently filed a court document outlining its plans to liquidate the company. The firm has come to the realization that selling the company would not be beneficial to its creditors. As a result, Blockfi has decided to take matters into its own hands and proceed with a self-liquidating transaction. Once the assets are distributed, the company will be wound down.
Blockfi Explores Self-Liquidation and Alternative Transaction Options
Blockfi has recently updated the community with a notice regarding its latest disclosure statement with the bankruptcy court. The update reveals that the crypto lender has made the decision to proceed with a self-liquidation transaction after several unsuccessful attempts to sell the business. With 660,000 client accounts, the top 50 creditors are owed $1.3 billion. However, there is a glimmer of hope for some, as the latest filing notes that certain classes of claims could potentially see recoveries “as high as 100%.”
“The debtors are proceeding with the self-liquidation transaction whereby the debtors will distribute their assets to creditors in accordance with the terms of the plan, followed by a wind-down of their affairs,” the court document published on kroll.com details. Blockfi’s biggest hopes for recovery lie in obtaining assets owed by the bankrupt entities Alameda Research and FTX. “While recoveries will be based on a number of factors, the largest driver of higher recoveries are our claims against Alameda and FTX,” Blockfi said in a tweet on Friday.
The plan published in the court filing outlines how various claim holders, including secured tax claims, account holder claims, general unsecured claims, and others, will be treated, while also mentioning the cancellation of Blockfi’s existing equity interests. Blockfi’s plan to proceed with a self-liquidating transaction is not yet set in stone, as it requires full approval from the bankruptcy court. The crypto lender has also noted that “certain crucial employees [are needed] to consummate the plan.” Meanwhile, a sale of the company is not completely off the table either, as the latest filing suggests that “an alternative transaction” is possible.
According to a court document, Blockfi has emphasized the importance of its employees in the company’s self-liquidation plan. The crypto lender has stated that the Blockfi platform was “developed in-house, [and] is written in a unique and esoteric programming language” that outsiders would have a difficult time understanding. Without the needed staff, “the debtors do not believe that the plan is feasible,” the court document discloses.
What do you think about Blockfi’s latest statement and its attempt to self-liquidate? Share your thoughts in the comments section below.
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