Although BlockFi requested a 90-day extension, the bankruptcy judge has granted the firm a 48-day extension.
Crypto lending platform BlockFi has been granted additional time to submit its Chapter 11 exit plan.
On April 19th, a US bankruptcy judge in New Jersey granted digital asset lender BlockFi an extension until May 15th to submit its bankruptcy exit plan.
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According to BlockFi lawyer Joshua Sussberg, the company, which filed for bankruptcy in November 2022, is considering selling its assets or finding an external investor to back a restructuring agreement.
Per the bankruptcy code, debtors must propose a Chapter 11 plan within the initial 120 days of filing. This meant BlockFi had to present its plan by March 27th. However, on March 21st, the crypto lender requested a 90-day extension, pushing the deadline to June 26th.
Despite this meaningful progress, given the size and complexity of these Chapter 11 cases, much work remains. <...> The Debtors request an extension of the Debtors’ exclusive right to <...> to ensure that the Debtors have necessary runway to effectuate one or more transactions to maximize creditor recoveries with minimal disruption.
The company reportedly owes up to $10 billion to over 100,000 creditors. Judge Michael Kaplan, who is overseeing the case, found it appropriate to grant an extension to facilitate the case's smooth progression.
The BlockFi customers committee has suggested that they should be permitted to take over the bankruptcy case to expedite the return of cryptocurrency held on the platform to creditors.
Committee lawyer Robert Stark informed Judge Kaplan that BlockFi's creditors are not sophisticated lenders but individual retail customers, "many of whom have lost their life savings."
The extended deadline for BlockFi to submit its Chapter 11 exit plan offers a crucial opportunity for the crypto lender to explore various options, ultimately aiming for a resolution that benefits both the company and its numerous creditors.
In other BlockFi-related news, at the beginning of April, Congress members questioned Circle and BlockFi over ties with collapsed Silicon Valley Bank.
