On April 19, a New Jersey bankruptcy judge gave digital asset lender BlockFi additional time to file a bankruptcy exit plan.
The cryptocurrency lender, which filed for bankruptcy in November 2022, has reportedly been given a 48-day extension until May 15 to file an exit plan. BlockFi attorney Joshua Sussberg said at Wednesday's hearing that the cryptocurrency firm is exploring the possibility of selling the company's assets or finding outside backers to support a restructuring deal. Under bankruptcy law, debtors should file a Chapter 11 bankruptcy plan within the first 120 days of filing. Therefore, BlockFi has until March 27 to submit its plans. However, on March 21, the company filed a request to extend the deadline for its Chapter 11 program by 90 days to June 26.
In defending the request to extend the deadline, BlockFi’s lawyers said there was “a lot of work to do” because of the size and complexity of the Chapter 11 case. The company is estimated to owe as much as $10 billion to more than 100,000 creditors. The bankruptcy judge handling the case, Judge Michael Kaplan, reportedly thought it was worth extending the deadline to keep the case moving forward.
Stark claimed that BlockFi lacked a viable restructuring business and would likely sell its platform, which he called a “bundle of sticks.” Although Kaplan rejected the committee’s appeal, he opted for a shorter deadline extension than BlockFi requested. The length of the extension is "modest," according to Sussberg, who said the company would have a plan ready for evaluation by unsecured creditors within two weeks.
