Plan Administrator Seeks Final Distribution to Make Customers
and Unsecured Creditors Whole; Sale Signifies Near End of BlockFi
Wind-Down
NEW
YORK, July 22, 2024 /PRNewswire/ -- Mohsin
Y. Meghji, Plan Administrator of BlockFi Inc. and Managing Partner
of M3 Partners, today filed a report to the United States
Bankruptcy Court for the District of New
Jersey announcing the closing of a significant transaction
that monetizes all claims against FTX at a substantial premium to
their face value and enables a near-term final distribution of 100%
by the Plan Administrator on all allowed customer and general
unsecured creditor claims.
"This transaction marks a final chapter in the wind-down and is
the best possible outcome for customers of BlockFi," Meghji said.
"These recoveries on customer claims, and the timeline those
recoveries will be distributed on, were unimaginable when these
cases were filed in November 2022.
These results, achieved through tireless efforts by various
parties, are remarkable. We intend to commence the Final Customer
Distribution as quickly as reasonably practicable," Meghji
concluded.
Following the settlement with FTX in March 2024 that allowed BlockFi to receive
$874.5 million in claims against FTX
and FTX affiliate Alameda Research, the Plan Administrator began
planning for subsequent distributions to BlockFi customers based on
anticipated FTX distributions. An important feature of the FTX
Settlement was that the Plan Administrator would have the option to
monetize the FTX Claims through a sale of the FTX Claims to a third
party.
In June 2024, the Plan
Administrator determined that a sale at a level sufficient to
maximize customer returns, generate significant recoveries for
subordinated creditors, and eliminate timing and execution risks to
the BlockFi estates with respect to their FTX Claims was possible.
The Plan Administrator then launched a sale process that began on
June 24, 2024, and closed on
July 10, 2024 after the highest and
best bid was determined. The purchase price was a substantial
premium to the face value of the FTX Claims.
BlockFi's platform is no longer active and any "in-kind"
distributions will be available only through the Plan
Administrator's partnership with Coinbase.
Distributions to BlockFi International creditors, in particular,
may require additional identify verification and "Know Your
Customer" diligence in compliance with international
standards.
The Plan Administrator is represented by Brown Rudnick LLP,
Genova Burns LLC, and Haynes Boone LLP, and is advised by M3
Partners as the Plan Administrator's financial advisor. A full
report has been submitted to the Court.
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SOURCE BlockFi