Terraform Labs, the company behind the now-defunct Terra blockchain project, has issued a crucial update regarding their Chapter 11 bankruptcy proceedings. In a recent notice, Terraform Labs informed creditors that August 21, 2024, serves as the deadline for filing Preliminary Crypto Loss Proof of Claim forms. This filing is essential for creditors who wish to participate in voting on the proposed Chapter 11 restructuring plan.
The Chapter 11 filing, initiated by Terraform Labs Pte. Ltd. on January 21, 2024, and Terraform Labs Limited on July 1, 2024, aims to restructure the company’s finances following the dramatic collapse of the TerraUSD (USTC) stablecoin earlier this year. The collapse sent shockwaves through the cryptocurrency market, with many investors suffering significant losses.
Eligibility and Process for Claim Submission
The claims process allows creditors, including individuals, partnerships, corporations, and government entities who incurred crypto losses due to their dealings with Terraform Labs before the bankruptcy filing dates, to participate in the restructuring plan.
To be eligible to vote on the plan, creditors must submit a claim form outlining their losses. The form requires the claim amount to be expressed in US dollars based on the petition date and be submitted in English. Importantly, the claims must be made under penalty of perjury, emphasizing the seriousness and accuracy of the information provided.
While supporting documentation isn’t mandatory at this initial stage, it might be requested later if the Chapter 11 plan is confirmed.
Submission Methods and Deadlines
Terraform Labs has outlined specific procedures for filing the claims. Creditors have two options: submitting electronically through the Epiq website, the court-appointed restructuring agent, or mailing the form to Epiq Corporate Restructuring, LLC. Electronic submission is strongly encouraged for faster processing.
Missing the August 21st deadline will result in exclusion from voting on the Chapter 11 plan. This highlights the importance for creditors who wish to have a say in the restructuring process to submit their claims promptly.
Current Market Status for LUNC and USTC
The announcement comes amidst a continued slump for Terra Classic (LUNC), the rebranded version of the original Terra (LUNA) token. At the time of writing, LUNC is trading at around $0.00009, reflecting a slight decline in the past 24 hours.
However, TerraUSD Classic (USTC) presents a contrasting picture. Despite ongoing volatility, USTC has experienced a minor price increase, trading at roughly $0.02. This price movement suggests some level of continued interest in the controversial stablecoin, though its future remains uncertain.
Looking Forward
The coming weeks will be crucial for Terraform Labs and its creditors. The August 21st deadline for claim submissions will determine the number of creditors eligible to vote on the Chapter 11 plan. The success of the restructuring effort hinges on an effective plan that addresses the concerns of all stakeholders involved.
