- Terraform Labs’ crucial bankruptcy hearing is set for Sept. 19, 2024, to approve the liquidation plan.
- Voting on Terraform Labs’ liquidation plan is critical as deadlines vary by claim class, with stringent procedures.
- Key legal protections in Terraform’s plan could shield parties from future lawsuits, barring fraud or misconduct.
Terraform Labs Pte Ltd and Terraform Labs Limited, currently navigating Chapter 11 bankruptcy proceedings, have a crucial Plan Confirmation Hearing scheduled for September 19, 2024, at 10:00 a.m. ET in the United States Bankruptcy Court for the District of Delaware.
This hearing will decide if the court will greenlight the Amended Chapter 11 Plan of Liquidation put forth by the companies. Judge Brendan L. Shannon will preside over the hearing at the Bankruptcy Court in Wilmington, Delaware.
The court approved the Disclosure Statement for the Amended Chapter 11 Plan on August 7, 2024, allowing Terraform Labs to gather votes for the plan. Under the proposed plan, the companies’ assets must be sold and the proceeds distributed to the creditors according to the court order.
Voting on the plan is critical, and certain classes of claims are eligible to vote, such as General Unsecured Claims, Crypto Loss Claims, and the SEC Claim. The record date for voting was set for Class 4 and Class 6 on August 9, 2024, and for Class 5 on August 21, 2024.
Holders of these claims must submit their votes by the specified deadlines. Class 4 and Class 6 claimants must vote by September 12, 2024, at 4:00 p.m. ET, while Class 5 claimants must submit their votes by September 16, 2024, at 12:00 p.m. ET.
Procedures around the voting processes are also strict, and any violations could disqualify a candidate. If claimants disagree with the classification or amount of their claim, they can file for Rule 3018(a) until September 3, 2024, allowing them to temporarily adjust their claims for voting.
All objections to the confirmation of the proposed plan must be filed by September 12, 2024, at 4:00 p.m., Eastern Time. These objections must be supported by enough evidence and be in accordance with the Bankruptcy Rules and Local Rules. The court will only consider objections filed and served in strict compliance with these requirements.
The proposed plan also includes release, exoneration, and injunction clauses on a fairly broad scale. These provisions aim to protect the parties involved in the bankruptcy from future lawsuits related to their participation in the process. The plan clarifies that these protections would not apply to anything that happens after the plan takes effect or to any activity that involves fraud, reckless misconduct, or willful misconduct.
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