{"id":12331,"date":"2023-05-22T21:10:36","date_gmt":"2023-05-23T01:10:36","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/blockfi-sent-out-reorganization-plan-prematurely-court-orders-them-withdrawn\/"},"modified":"2023-05-22T21:10:37","modified_gmt":"2023-05-23T01:10:37","slug":"blockfi-sent-out-reorganization-plan-prematurely-court-orders-them-withdrawn","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=12331","title":{"rendered":"BlockFi Sent Out Reorganization Plan \u2018Prematurely,\u2019 Court Orders Them Withdrawn"},"content":{"rendered":"
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Bankruptcy cryptocurrency lender BlockFi took back statements it made earlier this month about a plan to reorganize which it said was done \u201cprematurely.\u201d<\/p>\n

BlockFi released a \u201ccorrective letter to creditors\u201d on Friday, directed by the court, asking them to disregard certain statements posted to the court docket, on its website and on Twitter.\u00a0<\/p>\n

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\u201cThe Court has directed BlockFi to circulate this communication on behalf of the Official Committee of Unsecured Creditors (the \u201cCommittee\u201d) to clarify that the Court has not yet approved BlockFi’s disclosure statement or BlockFi’s ability to solicit acceptances of its plan,\u201d according to the letter.\u00a0<\/p>\n

The BlockFi Official Committee of Unsecured Creditors has seemingly disagreed with BlockFi\u2019s plan to reorganize.\u00a0<\/p>\n

The letter noted the divide, saying \u201c the Committee, among other parties, does not support the plan of reorganization in question. Among other issues, the Committee believes that the plan provides releases of litigation claims against, among others, current and former directors and officers of BlockFi that committed significant misconduct that harmed BlockFi and its customers.\u201d<\/p>\n

The committee said it tried to negotiate with BlockFi, in a tweet on May 16.<\/p>\n

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\u201cWe tried, really hard, to negotiate with BlockFi. Those efforts required keeping most of our investigation\u2019s findings out of the public domain to create a \u2018safe space\u2019 to negotiate. BlockFi decided to cut off negotiations.\u201d<\/p>\n<\/blockquote>\n

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Blockfi filed for bankruptcy following FTX\u00a0<\/h2>\n

BlockFi filed for Chapter 11 bankruptcy in November following the fallout of failed crypto exchange FTX.\u00a0<\/p>\n

The crypto lender paused withdrawals on Nov. 16<\/u>, and said it had \u201csignificant exposure to FTX\u201d and its affiliated companies.\u00a0<\/p>\n

As of 2021, BlockFi had between $14 billion and $20 billion worth of customer deposits and had lent out $7.5 billion, according to previous cryptonews.com reporting.\u00a0<\/p>\n<\/p><\/div>\n