An order may be sought from the Bermuda Supreme Court over a plan by troubled crypto lender, BlockFi, to pay creditor money back and exit Chapter 11 bankruptcy protection, The Coin Republic has reported.

BlockFi International Ltd., BlockFi’s Bermuda company, has already filed a petition with the court for a meeting of joint provisional liquidators.

Affected by the collapse of FTX, a cryptocurrency exchange, BlockFi, including its Bermuda firm and seven others, entered Chapter 11 bankruptcy in New Jersey last week. That was shortly after FTX sought Chapter 11 bankruptcy protection in California.

One of the largest exchanges by volume, FTX was set to acquire BlockFi next year. But after reports of liquidity issues and allegations of mismanagement of customer funds at FTX last month, both companies stopped allowing customer withdrawals.

BlockFi now plans to restructure as an independent firm, but has said that it will carry on a marketing process to sell all, or substantially all, of its assets.

The Coin Republic cites Mark Renzi of Berkeley Research Group, the firm’s financial adviser, as explaining in a past court filing: “During the time it is open to any option that increases worth, BlockFi came up with a proposed plan that examines an independent reorganisation, forecasted on the debtors’ target to offer clients as near to a complete recovery as possible.”

The article states that under its recommended plan of reorganisation, BlockFi will pay back all BlockFi wallet clients. Creditors who will possibly get less than 100 per cent of their claim would get a combo of cash as well as stock.

It added: “BlockFi has planned to invest in a plan with cash, coins, and new general stock in the restructured firm. The firm has about $256.9 million in cash on hand. It is anticipated that the amount is expected to offer ample liquidity to back specific functions in the reorganisation process.

“Account holders will get a pro-rata share of cash and an allotment of shares in the restructured company. Unsecured creditors will get cash or a part of the share allotment pool of new common stock in the restructured company.

“The potency of the plan also needs an order from the Bermuda Court identifying the US court’s order verifying the plan.”

FTX was close to purchasing BlockFi as a segment of a $400 million bailout of the company in June, before the FTX collapse.

BlockFi reportedly owes FTX $275 million.