BlockFi disclosure statement conditionally approved by court

Chicago, Aug. 2 – BlockFi Inc. announced that its disclosure statement has been conditionally approved by the U.S. Bankruptcy Court for the District of New Jersey as of Wednesday, according to a press release.

With the debtor, the official committee of unsecured creditors recommends that all entitled parties to vote should accept the plan by 4 p.m. ET Sept. 11, the voting deadline.

BlockFi is working to return digital assets held in BlockFi wallet accounts, and under the company’s plan also securely return non-wallet assets to credits after a wind down of the company’s affairs.

The plan offers releases to clients who do not opt out of a voluntary third-party release from all claims and causes of action BlockFi may have against them, except those clients whose withdrawals from BlockFi Interest Accounts or BlockFi Private Client Accounts on and after Nov. 2, 2022, are greater than $250,000.

Under the plan, BlockFi would not claw back amounts under $250,000 that clients properly transferred from their Interest Account or Private Account to Wallet and/or withdrew from Wallet before the platform pause on Nov. 10, 2022.

Clients with claims under $3,000, or clients electing to reduce their claim to $3,000, will be included in a convenience claim class and will receive a one-time cash distribution from the BlockFi estate.

Creditors in the convenience class will receive a one-time distribution of 50% of their claim in cash.

If the plan is confirmed, the company will focus its efforts on pursuing claims and causes of action in the litigation against Alameda, FTX, 3AC, Emergent, Marex, and Core Scientific to maximize recoveries for clients, and defending against claims by third parties, which threaten to dilute clients.

Haynes and Boone LLP, Kirkland & Ellis LLP, and Cole Schotz P.C. are serving as legal counsel, Moelis & Co. is serving as investment banker, and Berkeley Research Group is serving as financial adviser to the company. C Street Advisory Group, LLC is serving as strategy and communications advisor to the company.

Based in Jersey City, N.J., BlockFi is a crypto financial services company. The company filed bankruptcy on Nov. 28, 2022 under Chapter 11 case number 22-19361.

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