Bankruptcy crypto lender BlockFi retracted statements it made earlier this month regarding plans for reorganization, saying it was “premature.”
BlockFi issued a court-directed “corrective letter to creditors” on Friday, asking them to disregard certain statements posted on the court’s website and on Twitter.
“The Court directs BlockFi to disseminate this communication on behalf of the Official Committee of Unsecured Creditors (the “Committee”) to clarify that the Court has not yet considered BlockFi’s Disclosure Statement or the acceptability of BlockFi’s own plan. ability is not approved,” according to the letter.
BlockFi’s official committee of unsecured creditors appears to disagree with BlockFi’s restructuring plan.
The letter noted the split, “The committee, among other parties, does not support the plan of reorganization under consideration. Among other issues, the committee believes that the plan will be unfair to, among others, current and former directors. and issues litigation claims against Blockfi executives who committed material misconduct that harmed Blockfi and its customers.
The committee said it tried to negotiate with BlockFi in a tweet on May 16.
“We tried really hard to negotiate with BlockFi. Those efforts required keeping most of the findings of our investigation out of the public domain in order to create a ‘safe space’ for dialogue. decided to close.”
Blockfi files for bankruptcy after FTX
Blockfi filed for Chapter 11 bankruptcy in November following the fallout from failed crypto exchange FTX.
crypto lender blocked withdrawals 16 Novemberand said that it had a “significant risk to FTX” and its affiliated companies.
By 2021, BlockFi had between $14 billion and $20 billion in customer deposits and had lent $7.5 billion, according to the past. cryptonews.com reporting,