Bankruptcy court told FTX and Alameda they owe BlockFi $1B, but it’s complicated

A lawyer for BlockFi told the first-day hearing of its bankruptcy proceedings that the crypto lender has $355 million stuck on FTX and that the collapsed exchange’s sister company Alameda Research has defaulted on a $680 million loan.

BlockFi filed 15 motions on Nov. 28 that were approved by the court in the first day hearing on Nov. 29, including the redaction of personal details of its 50 largest creditors and the appointment of Kroll Restructuring Administration as its claims and noticing agent — the same firm chosen by FTX for its Chapter 11 bankruptcy case.

In a message emailed to worried clients, BlockFi noted that the approved motions allow it to continue “core operations” during the restructuring process and also to continue to pay its employees and independent contractors. BlockFi estimates that its wages bill is around $5.8 million per month and that it owed around $1.5 million in wages when it filed the motion on Nov. 28.

The message to clients said that BlockFi’s “singular focus” throughout the proceedings is “maximizing value for all clients and other stakeholders.”

According to a Nov. 29 CNBC report, BlockFi’s attorney, Joshua Sussberg, also added in the hearing that BlockFi plans

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16 Top Bankruptcy Lawyers Poised to Earn Millions As the Economy Turns

  • Corporate bankruptcies have hit rock bottom, with just 143 filings this year as of May.
  • But inflation, rising rates, and the “crypto winter” are creating a financial strain.
  • Here are 16 lawyers who may benefit as more companies negotiate with lenders and restructure their debt.

Lawyers who specialize in bankruptcies and debt restructurings have not seen many new cases in court for more than a year — but some are betting that’ll soon change.

Bankruptcy filings, which have been on a downward spiral since last year, continue to slump.  As of May, there were just 143 corporate bankruptcy filings, putting bankruptcies on pace for a record low. In 2021, there were just 410 filings, down from 640 in 2020, according to an S&P Global Market Intelligence report in June.

But there are pockets of activity, and more than a dozen top restructuring practitioners told Insider they expected more out-of-court workouts and new Chapter 11-protection filings over the next year. Conference-room negotiations between companies and their lenders, which tend to precede filings, are picking up speed, the lawyers said. 

Supply-chain problems, the uncertainty of the COVID-19 pandemic, inflation, and a decline in consumer confidence are likely to

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