Bankrupt crypto lender BlockFi has filed a motion to dismiss the bankruptcy case of Emergent Fidelity Technologies, the holding company owned by Sam Bankman-Fried (SBF), founder and former CEO of FTX.
in motion, archived Thursday in the United States Bankruptcy Court for the District of Delaware, BlockFi argued that Emergent is ineligible for a bankruptcy case since it has no assets other than 56 million shares of Robinhood.
BlockFi seeks to dismiss Emergent’s bankruptcy case
Remember that Emerging archived filed for voluntary Chapter 11 bankruptcy protection on February 5, nearly three months after FTX filed for insolvency.
The company, which is owned 90% by SBF and 10% by former FTX executive Gary Wang, had just $20.7 million in cash, 56 million Robinhood shares worth about $600 million dollars and no other assets.
Robinhood’s involvement has been a bone of contention between SBF and BlockFi due to a lending relationship between the two parties. Shortly after filing for bankruptcy in November, BlockFi defendant SBF and Emergent for custody of Robinhood shares.
During the court hearing in December, the crypto lender explained that the shares were pledged as collateral during a $680 million loan deal with Emergent involving FTX’s sister firm Alameda Research in November.
Although what is at stake is actually in in the custody of the US Department of Justice (DOJ), BlockFi insists on Emergent’s ineligibility for a bankruptcy case.
“Neither law nor equity require the performance of a futile act. But this bankruptcy case asks the Court to do just that: “reorganize” an empty shell. Emergent has no employees, income, or business; The only assets of him were shares of Robinhood Markets Inc. (the “Shares”) worth hundreds of millions of dollars,” BlockFi said.
“A Last Minute Litigation Tactic”
Furthermore, BlockFi argued that Emergent filed for bankruptcy as “a last minute litigation tactic” as it is not looking to maximize the value of its assets or preserve itself.
The distressed lender also insisted that the bankruptcy case existed solely to enrich Emergent’s liquidators, who have already received $1.7 million in fees.
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This post BlockFi Files Motion to Dismiss SBF’s Emergent Fidelity Bankruptcy Case
was published first on https://cryptopotato.com/blockfi-files-motion-to-dismiss-bankruptcy-case-for-sbfs-emergent-fidelity/