BlockFi withdraws reorganization plan statements following bankruptcy court order

Quick Take

  • BlockFi said in a letter made public Friday that statements about a bankruptcy reorganization plan should be disregarded.
  • The development illustrates continued friction between BlockFi and its unsecured creditors. 

BlockFi said in a letter made public Friday that statements about a bankruptcy reorganization plan should be disregarded.

The corrective letter, issued following an order by the U.S. Bankruptcy Court for the District of New Jersey, stated that the crypto lender "prematurely posted certain statements to the court docket, its website, and its Twitter feed on May 13, 2023, regarding a proposed plan of reorganization.

"We urge each of you to disregard those communications until such time as the publication and dissemination of such statements are authorized," the letter said. 

The court documents illustrate continued friction between BlockFi and a committee of unsecured creditors formed in the wake of the crypto lender's bankruptcy filing last November.

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The letter states that the committee is opposed to the reorganization plan, as are "other parties." It also indicates disagreement over elements of a proposed plan to liquidate BlockFi's lending platform and distribute funds to creditors. 

"The Committee also believes that it is not appropriate for BlockFi, via its current management and professionals, to control the liquidation of BlcockFi and distributions to creditors. The Committee has requested changes to the plan," the letter states. 

CoinDesk reported earlier Monday that a reorganization plan hearing is set for June.


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