Artha Investment Partners LLC has filed a motion in the U.S. Bankruptcy Court for the District of Delaware seeking the appointment of an independent examiner and a Chapter 11 trustee in the bankruptcy case of Reliz Technology Group Holdings Inc., the parent company of cryptocurrency platform BlockFills. The motion, filed May 5, 2026 as Docket No. 282, also asks the court to confirm that the automatic stay does not apply—or grant relief from it—so that Artha may pursue arbitration against non-debtor officers, directors, and affiliated parties.
Artha states that it transferred 3,500 ETH to Reliz in late 2025 under a Master Loan Agreement that required 120% collateralization. According to the motion, the debtors failed to post any collateral and solicited those assets while insolvent and without disclosing their financial distress or ongoing restructuring efforts. Artha incorporates by reference a supporting declaration and its prior objection to the Fourth Interim Cash Collateral Order (Dkt. No. 242), which set forth the underlying facts.
Parallel Litigation
The motion references two lawsuits filed by other counterparties as evidence of a broader pattern of alleged misconduct. Dominion Capital LLC filed suit in the Southern District of New York on February 27, 2026 (No. 1:26-cv-1672), alleging that BlockFills accepted cryptocurrency subject to contractual segregation obligations but commingled those assets and used them to fund operational expenses, trading losses, and third-party obligations. Dominion further alleges that BlockFills' board discovered this misconduct no later than August 2025 but concealed it, continued to solicit customer activity, and ultimately suspended withdrawals. Dominion's complaint asserts claims for fraudulent concealment, conversion, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violations of the Illinois Consumer Fraud Act.
A second action, filed in the Northern District of Illinois on March 5, 2026 by 1548199 Alberta Ltd. and an individual co-plaintiff (No. 26-cv-02451), asserts materially similar claims including fraudulent inducement and concealment, breach of contract, unjust enrichment, fraud, aiding and abetting fraud, negligent misrepresentation, conversion, constructive trust, and consumer protection violations.
CRO and CFO Testimony
At an April 16, 2026 hearing, BRG's Chief Restructuring Officer—retained in late August 2025—testified that within approximately one month of his engagement he determined the company "needed to do something to enhance its liquidity." When asked directly whether BlockFills was insolvent as of August 2025, the CRO stated that the company "had a liquidity issue" and that a determination of insolvency would require "a more extensive analysis." He declined to opine on whether liabilities exceeded assets, citing the absence of audited financial statements. The CRO also testified that he had "not done an analysis to conclude on the timing" of insolvency, and that he did not perform certain analyses typically expected of a restructuring advisor, such as determining when equity capital was depleted or tracing the use of funds. He further acknowledged that the company's financial statements were unaudited and that audits had been delayed.
At the Section 341 meeting of creditors on April 22, 2026, BRG's Chief Financial Officer was asked to identify when the debtors became insolvent. Despite approximately seven months of responsibility for the debtors' financial operations, the CFO did not provide an answer, characterizing the question as a "legal question."
The debtors have represented in their disclosure statement that the company faced an approximately $77 million balance sheet deficit.
Committee Discovery Dispute
The motion cites the Official Committee of Unsecured Creditors' Rule 2004 motion (D.I. 243) as further support, noting that informal discovery efforts have failed because the debtors have not produced a substantial body of documents. According to the committee's motion, access to records has been limited by the debtors' assertion of privileges, requiring the committee to seek broad third-party discovery from directors, officers, employees, lenders, and affiliates to reconstruct basic facts about asset disposition and financial condition.
Legal Basis for Relief
For the examiner appointment, Artha relies on 11 U.S.C. § 1104(c), which requires a court to appoint an examiner upon request where fixed, liquidated, unsecured debts exceed $5 million. Artha argues the debtors' unsecured debt—which it characterizes as tens of millions of dollars—satisfies that threshold, making appointment mandatory under the Third Circuit's decision in In re FTX Trading Ltd., 91 F.4th 148 (3d Cir. 2024), which held that the statute's use of "shall" leaves no room for judicial discretion once the threshold is met.
For the trustee appointment, Artha invokes 11 U.S.C. § 1104(a) and the Third Circuit's decision in In re Sharon Steel Corp., 871 F.2d 1217 (3d Cir. 1989), arguing that alleged fraud, commingling, misrepresentation of financial condition, and structural conflicts of interest constitute "cause." The motion identifies a structural conflict involving an individual it alleges solicited Artha's ETH and is connected to entities aligned with the debtors' largest unsecured creditor group, which Artha contends creates the same type of conflict the Sharon Steel court identified as warranting trustee appointment.
Artha also argues that the cost of appointing a trustee and examiner does not outweigh the ongoing harm to the estate, contending that the existing debtor-in-possession structure has not produced transparency or accountability, and that professional fees continue to accrue while core questions about insolvency and asset handling remain unresolved.
Schedule
Objections to the motion are due May 19, 2026 at 4:00 p.m. Eastern Time. A hearing is scheduled for May 28, 2026 at 2:00 p.m. Eastern Time before Judge Thomas M. Horan.
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