BlockFi Turns to Kirkland, Haynes Boone for Bankruptcy Case

BlockFi files for bankruptcy protection after FTX blowout. Kirkland, Haynes Boone, Cole Schotz among advisors

November 28th, 2022 / Bloomberg Law – BlockFi Inc. is counting on lawyers from Kirkland & Ellis, Haynes and Boone and Cole Schotz to work out a plan to repay creditors as the crypto firm filed for bankruptcy following FTX’s sudden collapse. Kirkland and Haynes Boone will serve as general bankruptcy co-counsel, according to the court filing in New Jersey on Monday. Cole Schotz is local counsel.

Joshua Sussberg and Christine Okike are leading the case for Kirkland, according to two people familiar with the matter. Richard Kanowitz heads the Haynes Boone team, a firm spokesman confirmed. Michael Sirota is the attorney of record for Cole Schotz in the bankruptcy docket.

Kirkland has taken an early lead advising on large crypto bankruptcies, as it is advising crypto lenders Celsius Network LLC and Voyager Digital Holdings Inc., which sought bankruptcy protection earlier this year.

The rise of crypto bankruptcies has provided some firms much more work in recent months in the countercyclical practice, bolstering some groups against a wider downturn in transactional activity like capital markets and mergers and acquisitions.

BlockFi lists assets and liabilities between $1 billion and $10 billion each, according to its petition. The company has around $257 million of cash on hand. BlockFi has turned to former Kirkland partner Jon Henes’ C Street Advisory Group for restructuring advisory services and strategic communications, according to the filing.

Sussberg in July told a bankruptcy judge that the first-of-its-kind crypto bankruptcy filed by Voyager was “uncharted territory” as the company seeks to return assets to customers.

Okike joined Kirkland from longtime restructuring rival Skadden last year, becoming the firm’s first lateral restructuring partner hire since 2009. That hire came during a boom in pandemic-induced bankruptcy filings that petered out and led to a prolonged downturn in major Chapter 11 filings. Haynes Boone’s Kanowitz is a New York partner who joined the firm in 2020 from Cooley, where he’d spent more than 20 years representing corporate debtors, creditors’ committees and other parties in restructurings. Crypto exchange FTX has turned to Sullivan & Cromwell to lead its bankruptcy case.

Read the Bloomberg Law article