Bankrupt crypto lender BlockFi has filed a movement to dismiss the chapter case for Emergent Constancy Applied sciences, the holding agency owned by Sam Bankman-Fried (SBF), founder and former CEO of FTX.
Within the movement, filed on Thursday in the USA Chapter Courtroom for the District of Delaware, BlockFi argued that Emergent just isn’t eligible for a chapter case because it has no different belongings than 56 million Robinhood shares.
BlockFi Seeks to Dismiss Emergent’s Chapter Case
Recall that Emergent filed for voluntary Chapter 11 chapter safety on February 5, nearly three months after FTX grew to become bancrupt.
The corporate, which is 90% owned by SBF and 10% by former FTX government Gary Wang, had simply $20.7 million in money, 56 million Robinhood shares value roughly $600 million, and no different belongings.
The Robinhood stake has been a bone of rivalry between SBF and BlockFi as a result of a lending relationship between each events. Shortly after submitting for chapter in November, BlockFi sued SBF and Emergent over custody of the Robinhood inventory.
In the course of the courtroom listening to in December, the crypto lender explained that the shares had been pledged as collateral throughout a $680 million mortgage settlement with Emergent involving FTX’s sister agency Alameda Analysis, in November.
Though the stakes are currently in the custody of the U.S. Division of Justice (DOJ), BlockFi insists on Emergent’s ineligibility for a chapter case.
“Neither regulation nor fairness require the doing of a futile act. However this chapter case asks the Courtroom to just do that – to “reorganize” an empty shell. Emergent has no workers, no earnings, and no enterprise; its sole belongings had been shares in Robinhood Markets Inc. (the “Shares”) value lots of of hundreds of thousands of {dollars},” BlockFi stated.
“A Final-ditch Litigation Tactic”
Moreover, BlockFi argued that Emergent filed for chapter as “a last-ditch litigation tactic,” as it’s not in search of to maximise the worth of its belongings or protect itself.
The distressed lender additionally insisted that the chapter case existed solely to counterpoint Emergent’s liquidators, who’ve already acquired $1.7 million in charges.
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