Terra Bankruptcy Confirmation Hearing Scheduled for September 19

Bittime - Terra announced bankruptcy confirmation hearing dates for Terraform Labs Pte Ltd (TFL) and Terraform Labs Limited (TLL) in Chapter 11 bankruptcy cases.  

The Fall of Terra

Terra is starting to attract global attention for its unique approach to algorithm-backed stablecoins.  However, Terra experienced a major crisis in mid-2022, leading to a drastic collapse in the prices of its flagship LUNA token and UST stablecoin.

This collapse had a huge impact not only on investors, but also on the Terra ecosystem. Many projects that depended on the stability of UST and LUNA were destroyed in a matter of days. 

Read Also: Terra Extends Deadline for Terra Loss Claims

Terra Bankruptcy Hearing

This then sparked numerous lawsuits and ultimately prompted Terraform Labs to file for Chapter 11 bankruptcy, which is designed to provide temporary protection while finding the best possible outcome for all parties involved. Terra's bankruptcy trial is scheduled to take place on September 19 2024, at 21.00 UTC+7.

What is Bankruptcy Chapter 11?

Chapter 11 is a type of bankruptcy that allows a company to restructure debts while remaining operational. In Terraform Labs' case, Chapter 11 provides time for the company to evaluate its financial situation, explore restructuring options, and negotiate with creditors. 

The main goal of this process is to develop a plan that maximizes value for creditors and allows the company to get back on its feet.

A confirmation hearing is very important in the bankruptcy process. At this hearing, the court will review the restructuring plan submitted by Terraform Labs and decide whether the plan can be approved. 

If approved, Terraform Labs will be able to proceed with a restructuring process with court support, which could include repayment of some debts, sale of assets, or other steps deemed necessary.

Read Also: Terraform Labs Plans to Sell Its 4 Main Businesses for $4.5 Billion 

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