• Terraform Labs confirms the bankruptcy hearing date as September 19, 2024.

  • Any objections to the bankruptcy plan must be filed by September 12, 2024.

Terraform Labs, the company behind the troubled TerraUSD stablecoin, is progressing through its Chapter 11 bankruptcy proceedings. The U.S. Bankruptcy Court has set a “confirmation hearing” for September 19, 2024, to evaluate the company’s proposed restructuring and liquidation plans for Terraform Labs Pte Ltd. and Terraform Labs Limited.

On August 7, 2024, the court approved the disclosure statement for Terraform Labs’ amended Chapter 11 Plan of Liquidation. This approval marks a significant step as the court prepares to review the detailed plan during the upcoming confirmation hearing.

As part of the proceedings, disputes over claim amounts must be resolved by September 3, 2024. Eligible creditors, including those with General Unsecured Claims, SEC Claims, and Crypto Loss Claims, will need to cast their votes by September 12 and September 16, 2024, respectively. 

Any objections to the plan are required to be filed by September 12, 2024. The plan also includes broad injunctions against actions affecting the debtors or their assets, effective from the confirmation date until the wind-down completion date.

What’s Happening With Terraform Labs?

Following the collapse of TerraUSD, which disrupted the cryptocurrency markets in 2022, Terraform Labs filed for bankruptcy in Delaware on January 21, 2024. In their bankruptcy filing, the company reported assets and liabilities ranging from $100 million to $500 million. 

Further, in June, the company agreed to a $4.47 billion settlement with the U.S. SEC, resolving the allegations against it. This settlement marks the second major case in the cryptocurrency industry to exceed $4 billion in penalties.

Additionally, the liquidators of the defunct cryptocurrency hedge fund Three Arrows Capital have filed a $1.3 billion lawsuit against Terraform Labs, claiming losses incurred due to the collapse of the Terra network in 2022. This lawsuit adds another layer of complexity to the legal and financial challenges facing Terraform Labs.

This complex situation, including ongoing legal issues for co-founder Do Kwon, continues to capture significant attention within the crypto community.

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