BlockFi and eight of its affiliates have filed voluntary petitions for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey.
This move was taken yesterday in order to stabilize the company’s operations and give the company the chance to complete a thorough restructuring transaction that would maximize value for all customers and other stakeholders.
The company has said that one of the primary focuses of its restructuring activities would be the collection of all debts that are due to BlockFi by its counterparties. These obligations include FTX and affiliated corporate entities.
BlockFi anticipates that recovery from FTX will be delayed as a result of the recent collapse of FTX and the subsequent bankruptcy procedure that has followed, both of which are still active.
As soon as they heard about the failure of FTX, the management team and board of directors of BlockFi promptly took steps to safeguard their customers and the firm itself. In order to facilitate a seamless transition into Chapter 11, BlockFi is in the process of submitting to the court a number of routine motions requesting that the Company be permitted to continue running its business.
These petitions include requests to pay employee salaries and maintain employee benefits without interruption, for which the firm hopes to gain court permission, as well as to construct a Key Employee Retention Plan to guarantee that the company keeps skilled internal employees for business-critical operations throughout the process of filing for chapter 11.
Additionally, today the business launched a strategy inside the corporation to significantly cut expenditures, especially those associated with employee costs.