The Official Committee of Unsecured Creditors of Power Block Coin, L.L.C. has filed a comprehensive liquidation plan in the U.S. Bankruptcy Court for the District of Utah, proposing to wind down the cryptocurrency financial services company under Chapter 11 protection (Case No. 24-bk-23041-JTM).
Filed by Greenberg Traurig, LLP on January 30, 2025, the plan outlines a strategy to maximize value for creditors through the establishment of a Liquidating Trust overseen by an independent trustee. The proposal comes after Power Block Coin, which operated under the name SmartFi, filed for bankruptcy protection on June 20, 2024.
The plan addresses claims totaling over $192 million, including significant claims from Celsius Network LLC exceeding $133 million. A key component involves the appointment of a disinterested Liquidating Trustee to manage the company's assets, including pursuing potential legal claims and overseeing distributions to creditors.
Under the proposed structure, secured and priority claims would be paid in full, while general unsecured creditors would receive pro rata distributions from liquidated assets. The plan notably provides no recovery for equity interests, which would be cancelled.
The committee's filing raises concerns about the company's pre-bankruptcy management, citing unexplained losses of cryptocurrency assets and questioning several insider transactions, including loans made to affiliated entities at allegedly below-market rates.
A significant asset under scrutiny is a $17.4 million loan to Solara Communities LLC, an affiliate developing real property in Toquerville, Utah. The committee expressed concerns about this loan's unsecured status and recent encumbrances placed on the underlying property.
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Document length: 51 pages