BlockFi plans to sell $160 million worth of bitcoin-backed mining loans amid bankruptcy proceedings. The company has also requested to pay bonuses to key talent to retain employees.
The recent Bloomberg report revealed the company had started a bidding process for mining loans last year. However, some of those loans, which are around $160 million backed by 68,000 Bitcoin mining machines, could be undercollateralized, given the decline in the price of Bitcoin mining equipment. The last day for bidders to submit the offer is January 24.
BlockFi has been a major lender in the mining sector, even though it represents only a minority of the company’s assets. The decision to sell the loans may be due to an attempt to pay off the company’s creditors. According to the bankruptcy filing in November, BlockFi has over 100,000 creditors, and the company has already sold $239 million from its portfolio to cover legal expenses.
Related: BlockFi files for Chapter 11 bankruptcy
In November, the company warned it might cut 70% of its jobs to stay afloat. However, in a January 23 statement, the company asked a bankruptcy court to allow bonuses for key employees. The chief people officer of BlockFi, Megan Crowell, said that many talents have already left the company due to bankruptcy proceedings and uncompetitive compensation:
In the event additional Participants resign, I believe that the Debtors would struggle to adequately source candidates who could operate the BlockFi platform effectively, severely limiting the Debtors’ options in these chapter 11 cases. Moreover, hiring new employees would require the Debtors to incur significant operational and financial costs.
Crowell has suggested a plan in which employees would receive bonuses ranging from 20-50% of their salaries if they choose to stay with the company until January 31.
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