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BlockFi Files Motion to Dismiss SBF's Emergent Fidelity Bankruptcy Case
Bankrupt crypto lender BlockFi has filed a motion to dismiss bankruptcy proceedings for Emergent Fidelity Technologies, the holding company of Sam Bankman-Fried (SBF), founder and former CEO of FTX. In Motion, Filed On Thursday, BlockFi argued in the United States Bankruptcy Court for the District of Delaware that Emergent was ineligible for bankruptcy proceedings because it had no assets other than 56 million Robinhood shares. BlockFi Seeks to Dismiss Emergent's Bankruptcy Case Recall that Emergent filed for voluntary Chapter 11 bankruptcy protection on February 5, nearly three months after FTX became insolvent. The company that…
BlockFi Files Motion to Dismiss SBF's Emergent Fidelity Bankruptcy Case
Bankrupt crypto lender BlockFi has filed a motion to dismiss bankruptcy proceedings for Emergent Fidelity Technologies, the holding company of Sam Bankman-Fried (SBF), founder and former CEO of FTX.
In motion,filedOn Thursday, BlockFi argued in the United States Bankruptcy Court for the District of Delaware that Emergent was ineligible for bankruptcy proceedings because it had no assets other than 56 million Robinhood shares.
BlockFi is trying to dismiss Emergent’s bankruptcy case
Remember this Emergentfiledfor voluntary Chapter 11 bankruptcy protection on February 5, nearly three months after FTX became insolvent.
The company, which is 90% owned by SBF and 10% owned by former FTX executive Gary Wang, had just $20.7 million in cash, 56 million Robinhood shares worth around $600 million, and no other assets.
The Robinhood stake has been a bone of contention between SBF and BlockFi due to a lending relationship between both parties. Shortly after filing for bankruptcy in November, BlockFisuedSBF and Emergent on custody of Robinhood shares.
During the court hearing in December, the crypto lenderexplainedthat the shares were pledged as collateral in November during a $680 million loan deal with Emergent involving FTX's sister firm Alameda Research.
Although the stakes arecurrently inIn the custody of the US Department of Justice (DOJ), BlockFi insists that Emergent be ineligible for bankruptcy proceedings.
"Neither law nor equity requires a futile act. But this bankruptcy case asks the court to do just that - 'reorganize' an empty shell." Emergent has no employees, no income and no business; “his only assets were hundreds of millions of dollars worth of shares of Robinhood Markets Inc. (the “Shares”),” BlockFi said.
“One Final Litigation Tactic”
Additionally, BlockFi argued that Emergent filed for bankruptcy as “a last-ditch litigation tactic” because it is not trying to maximize the value of its assets or preserve itself.
The distressed lender also insisted that the bankruptcy case only existed to enrich Emergent's liquidators, who have already received $1.7 million in fees.
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