The customers of BlockFi, the bankrupt cryptocurrency lending platform, seem to be just a step closer to being paid out of a Bankruptcy Court in the country in New Jersey, as the court went on to approve the liquidation plan. Michael A. Kaplan, the bankruptcy Judge, approved the third amended Chapter 11 plan of the bankrupt company in a court filing that took place on the 26th of September, according to a filing from the same day.
The amount of repayment that has been received by the unsecured creditors of the company will depend largely on whether the company succeeds in its legal battle against FTX and several other bankrupt cryptocurrency firms. The company filed its first liquidation plan with the bankruptcy court on the 28th of November but had to then submit a first, second, as well as a third amended plan on the 12th of May, 28th of June, and the 31st of August as shown by court filings.
BlockFi Could Be Paying Its Clientele After Going Bankrupt
The liquidation plan of BlockFi was initially approved after the firm had settled a long-fought dispute with the committee of creditors over the senior management of the company. A court filing from the 25th of September shows that the creditors committee of the company acknowledged that the settlement did reduce the additional administrative fees and expenses that could have cut into the recoveries.
Estimates have shown that BlockFi owes around $10 billion to over 100,000 creditors, which includes a sum of $1 billion to the three largest creditors, and a sum of $220 million to Three Arrows Capital, the bankrupt crypto hedge fund. The company is currently being represented by Kirkland & Ellis LLP, and Haynes and Boone LLP