(Reuters) — Executives at bankrupt crypto lender BlockFi Inc have repaid an investor $15 million to settle a threatened lawsuit over the company’s cratering stock value last summer, the company’s lawyers said in bankruptcy court on Monday.
The settlement resolved claims by the investor, identified only as “Counterparty A,” who had bought shares issued as part of executive compensation packages, BlockFi attorney Joshua Sussberg said at a bankruptcy court hearing in Trenton, New Jersey.
The shares were sold at a discount to the company’s January 2022 valuation of $6 billion to $8 billion, but their value plummeted over the summer as the collapse of two cryptocurrencies wreaked widespread havoc on crypto markets.
The BlockFi investor threatened to sue, claiming that BlockFi and its executives should have been more transparent about contagion risks in the cryptocurrency market, according to Sussberg.
BlockFi considered the investor̵7;s claims “outlandish,” but it reached a confidential settlement on Aug. 23 under which BlockFi executives paid back $15 million to the investor, Sussberg said.
The largest payment during that settlement was made by BlockFi founder Zac Prince, who repaid $6.144 million.