Bankrupt firms BlockFi and FTX have announced an agreement “in principle” to settle their disputes.
According to a March 6 court filing, FTX has committed to paying up to $874.5 million to BlockFi, marking a potential resolution to a long-standing legal battle between the two entities.
Under the agreement terms, subject to court approval, BlockFi stands to receive compensation that includes an allowed customer claim of $185.2 million against FTX.com. This claim represents the full value of assets held on the exchange as of the FTX petition date.
BlockFi will also receive a claim of $689.3 million against Alameda Research, primarily concerning loans extended to the company. $250 million out of the entire amount will be treated as a secured claim, ensuring expedited payment to BlockFi once FTX’s proposed reorganization plan is confirmed.
The failed exchange has also agreed to waive or subordinate all other claims against BlockFi, effectively clearing the path for a smoother resolution. This paves the way for BlockFi’s support of FTX’s proposed reorganization plan, ultimately aiding in closing the ongoing legal proceedings. The remaining amount depends on FTX’s capacity to settle its obligations to its customers and other creditors initially.
The administrators overseeing BlockFi’s bankruptcy have noted that prompt mediation made this outcome possible, reducing litigation expenses and redirecting funds for legal disputes with FTX toward customer payouts.
BlockFi sought Chapter 11 bankruptcy protection on November 28, 2022, attributing its financial troubles to FTX’s collapse earlier that month. Legal disputes ensued in 2023, with BlockFi claiming FTX owed it over $1 billion.
This amount comprised a $400 million credit line and nearly $900 million lent to Alameda Research, primarily collateralized by FTX’s token, FTT. Concurrently, BlockFi faced liabilities, owing FTX.US up to $275 million under a 2022 rescue loan deal.
Efforts to resolve disputes between BlockFi and FTX started when Chapter 11 proceedings were initiated. The initial focus centered on recovering approximately $185 million in digital assets held on the exchange and around $690 million loaned to Alameda Research.
However, counterclaims and competing assertions from FTX have complicated the resolution process. The preliminary resolution reached in September 2023 laid the groundwork for the recent agreement, with FTX agreeing to waive most of its claims against BlockFi.
The post FTX, Alameda Settle with BlockFi, Set to Pay $874 Million appeared first on CryptoPotato.
According to a March 6 court filing, FTX has committed to paying up to $874.5 million to BlockFi, marking a potential resolution to a long-standing legal battle between the two entities.
$874 Million Settlement
Under the agreement terms, subject to court approval, BlockFi stands to receive compensation that includes an allowed customer claim of $185.2 million against FTX.com. This claim represents the full value of assets held on the exchange as of the FTX petition date.
BlockFi will also receive a claim of $689.3 million against Alameda Research, primarily concerning loans extended to the company. $250 million out of the entire amount will be treated as a secured claim, ensuring expedited payment to BlockFi once FTX’s proposed reorganization plan is confirmed.
The failed exchange has also agreed to waive or subordinate all other claims against BlockFi, effectively clearing the path for a smoother resolution. This paves the way for BlockFi’s support of FTX’s proposed reorganization plan, ultimately aiding in closing the ongoing legal proceedings. The remaining amount depends on FTX’s capacity to settle its obligations to its customers and other creditors initially.
The administrators overseeing BlockFi’s bankruptcy have noted that prompt mediation made this outcome possible, reducing litigation expenses and redirecting funds for legal disputes with FTX toward customer payouts.
BlockFi Settles Billion Dollar Dispute
BlockFi sought Chapter 11 bankruptcy protection on November 28, 2022, attributing its financial troubles to FTX’s collapse earlier that month. Legal disputes ensued in 2023, with BlockFi claiming FTX owed it over $1 billion.
This amount comprised a $400 million credit line and nearly $900 million lent to Alameda Research, primarily collateralized by FTX’s token, FTT. Concurrently, BlockFi faced liabilities, owing FTX.US up to $275 million under a 2022 rescue loan deal.
Efforts to resolve disputes between BlockFi and FTX started when Chapter 11 proceedings were initiated. The initial focus centered on recovering approximately $185 million in digital assets held on the exchange and around $690 million loaned to Alameda Research.
However, counterclaims and competing assertions from FTX have complicated the resolution process. The preliminary resolution reached in September 2023 laid the groundwork for the recent agreement, with FTX agreeing to waive most of its claims against BlockFi.
The post FTX, Alameda Settle with BlockFi, Set to Pay $874 Million appeared first on CryptoPotato.
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