Defunct Crypto Lender BlockFi Gets Extension for Restructuring Plan

• The court ruled that a little delay was acceptable for the case’s smooth continuation.
• The committee said that they wanted to see evidence before granting an extension.

A bankruptcy court in New Jersey ruled on Wednesday that the cryptocurrency platform BlockFi Inc. has until the middle of the next month to submit its Chapter 11 or reorganization plan. The court ruled that a little delay was acceptable to ensure the case’s smooth continuation.

Representing BlockFi, attorney Joshua Sussberg allegedly called the delay “modest.” And promised that within two weeks, the company will have a plan ready for review by the unsecured creditors.

Most Likely Final Deadline

U.S. Bankruptcy Judge Michael B. Kaplan noted “unusual” legal and regulatory hurdles for the plan, as reported by Law360, and expressed a desire to avoid “wasted dollars and efforts” in processing the multiple plan applications.

Judge Kaplan was cited when giving his decision, saying:

“The estate does not benefit necessarily from competing plans. I want this process to go forward with all eyes wide open.”

The committee had argued that there was no reason to maintain the company in bankruptcy and that there was no credible reorganizational plan. During the hearing, the committee said that they wanted to see evidence before deciding whether or not to give BlockFi an extension.

Judge Kaplan said that it was unnecessary and might cause weeks of litigation over the extension and other matters. Following the crypto market massacre caused by FTX’s epic failure, BlockFi filed for bankruptcy in November of last year.

After receiving heavy opposition from its unsecured creditors, once-famous cryptocurrency trading platform BlockFi filed a fresh petition asking for the deadline for submitting its Chapter 11 plan to be pushed back to May instead of 3 months.

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