BlockFi’s Crypto Mining Assets May Be Headed to Market After Bankruptcy Hearing
Bankrupt crypto lender BlockFi appears on track to sell some assets after a New Jersey bankruptcy judge expressed approval of the plan as part of Chapter 11 proceedings designed to restore funds to creditors.
Under a proposal put to the bankruptcy court on Monday, bidders for BlockFi’s crypto mining assets would have until Feb. 20 to submit bids with an auction the following week.
“I think it’s a workable and certainly an expeditious and efficient process that’s contemplated,” Judge Michael Kaplan said, after the U.S. government and a committee representing creditors withdrew their objections. “We’ll all keep our fingers crossed that it produces significant results.”
The sale would be the first in a number of potential auctions, BlockFi’s attorneys told the court.
“We’ve received substantial interest in the market for certain asset packages and we expect to receive even more bids going forward,” Francis Petrie of law firm Kirkland & Ellis said after a Jan. 9 legal filing cited 35 potential counterparties. “Given the practical realities of the debtors’ circumstances, and the current volatility in the cryptocurrency market, we need to act quickly to preserve the value of our assets.»
BlockFi’s attempts to get its hands on hundreds of millions of dollars worth of stocks in Robinhood (HOOD), however, have taken a further turn following parallel legal proceedings in Antigua, the New Jersey court was told.
“On January 27, the court in Antigua granted Sam Bankman-Fried’s motion to stay the liquidation proceedings,” said Richard Kanowitz of Haynes Boone, also representing BlockFi. “They granted leave to appeal, which he must file within 21 days.”
The 56 million shares, with a current value of around $577 million, are the subject of a complex tussle between BlockFi, bankrupt crypto
According to court filings earlier in January, the shares have been seized by the DOJ, which is investigating Bankman-Fried, who has pleaded not guilty to charges including wire fraud. Bankman-Fried has also said he was willing to give the shares to FTX customers, though in court he opposed a related bid by FTX to claim ownership.
Dependent on FTX for a $400 million line of credit, BlockFi filed for Chapter 11 bankruptcy protection on Nov. 28, shortly after FTX did the same. On Friday, Kaplan approved a $10 million BlockFi bonus pot intended to avoid staffers leaving the company.
Read more: BlockFi’s $10M Staff Bonus Package Approved by NJ Bankruptcy Court Judge
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