BlockFi’s Bankruptcy Journey
BlockFi, the digital asset lender that took a rather unfortunate tumble into bankruptcy back in November 2022, has been granted a 48-day extension to whip up an exit plan. As they say, when life gives you lemons, make some potent lemonade, or in BlockFi’s case, perhaps some overhyped crypto cocktails.
New Deadline and New Strategies
The New Jersey bankruptcy judge, ever the patient referee in this courtroom drama, has declared that BlockFi now has until May 15 to lay out their escape route. This extension comes after BlockFi’s lawyer, Joshua Sussberg, revealed that the firm is considering all options, including the sale of assets or finding a knight in shining armor (read: outside backer) for a rescue.
Why the Delay?
The bankruptcy code mandates that debtors unveil their Chapter 11 plans within 120 days of filing, which means BlockFi’s deadline was originally set for March 27. However, with an estimated debt of $10 billion to over 100,000 creditors, it’s clear that simply typing ‘Help!’ isn’t going to cut it. They filed to prolong the deadline to June 26, citing the vast scale and complexity of their financial woes.
The Creditors’ Perspective
In the world of finance, it seems that empathy isn’t always a common currency. A committee of BlockFi customers chimed in, arguing that they should have a hand on the wheel. Their lawyer, Robert Stark, painted a vivid picture of everyday people crushed by the weight of their misplaced trust in this digital lender. Many of these “mom-and-pop” investors are, allegedly, facing the painful prospect of losing their life savings.
The Judge’s Call
Judge Michael Kaplan, apparently wearing both the gavel and the serious hat, opted not to hand over control of the case to the creditors, but he did grant a shorter extension than BlockFi had requested. Sussberg termed the extension “modest,” which is probably lawyer-speak for “things are still pretty rough.” But fear not; he assured all involved that a plan would be ready for creditors’ scrutiny in just two weeks. Fingers crossed!
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