BlockFi, a crypto lending platform, made a bankruptcy court filing today. They also shared a pdf that covered all the important details of the sale process. BlockFi had the final nail in the coffin after they were unable to claim the Robinhood shares, which were pledged as collateral to them for a loan to Alameda Research.
Let’s take a quick look at BlockFi’s roadmap for a bankruptcy filing.
Progress since the first day of the hearing
After BlockFi had their first day of the hearing, they contacted more than 100 potential buyers to purchase a part or all of their business. The bidding process for debtors will start on January 30, 2023. The company has also filed for a wallet withdrawal motion. It is still not heard, but it will be soon. The main points of the same are:
- Honouring the client withdrawals from the wallet
- Updating the user interface
- Course reconciliation of client accounts
BlockFi’s debtors have also filed for “second-day” motions and retention applications. Under the 2nd day motions, we have
- Rejection Procedures Motion [Docket No. 122]
- Motion for Administrative Fee Order [Docket No. 123]
- Ordinary Course Professionals Motion [Docket No. 124]
- Loan Procedures Motion [Docket No. 125]
- Motion to Seal Names of M&A Counterparties [Docket No. 127]
While for the retention applications, the companies are Kirkland & Ellis LLP, Haynes Boone, Cole Schotz, BRG Kroll and Moelis & Company.
US Trustee has also appointed a committee to represent unsecured creditors, with 9 clients in the committee as members.
After this, on Jan 6, 2023, the debtors and the committee met for further discussion.
FTX’s impact on BlockFi
The FTX transaction of a $400M loan safeguarded clients and stabilised BlockFi. Although the transaction’s structure ensured liquidity for BlockFi’s consumers, it also caused the company’s executives and workers to lose stock value.
BlockFi also changed how its workforce was organised, cutting the number of employees by over 20% to better preserve client value and chart a road for profitability. Implementing a go-forward pay structure became essential and necessary simultaneously to retain the business-critical skills required to complete the FTX transaction.
What are your thoughts on BlockFi Bankruptcy filing and the current state it is in? And do you think that this major mess was because of FTX? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.
Also Read: SBF says he needs Robinhood shares more than customers.
