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In a hearing on 6 February, New Jersey Bankruptcy Court Judge Michael Kaplan settled the dispute in which BlockFi claimed 3AC owed it $129 million, while the Singapore-based firm claimed BlockFi owed it $280 million.
However, Kaplan declined to unseal the settlement agreement on the grounds it would be "counterintuitive" to do so. The US Trustee objected to the seal, stating the debtors had not justified the seal.
BlockFi argued that the terms were commercially sensitive and could impact litigation against FTX.
The approval now allows BlockFi to proceed with distributions from the lending estate to the 100,000 creditors, which the firm owes up to $10 billion.
It follows another agreement between 3AC and Genesis, in which the latter settled $1 billion in claims by 3AC.
3AC filed for bankruptcy in July 2022, citing the extreme fluctuations in cryptocurrency markets as the reason for its business collapse.
In a December report to creditors, Teneo estimated that creditors would receive approximately 45.74% of their claims from the bankrupt estate. The estimated value of 3AC's assets as of December 18, 2023, stood at $1.16 billion, while claims totaling $2.7 billion are expected to be recognized for distribution.
The report revealed that there were 154 claims filed against the 3AC estate, with a total value of $3.4 billion. Of these claims, $200 million were not admitted for distribution, while $322 million of claims have either been rejected or are expected to be rejected. Additionally, claims worth $76 million are currently being disputed.
BlockFi filed for Chapter 11 bankruptcy along with eight of its affiliates in November 2022. The firm said that it had “significant exposure” in the form of obligations owed to BlockFi by FTX-linked hedge fund Alameda, assets on the FTX platform, and an undrawn credit line from FTX.