Linqto’s restructuring and customer recovery plan

analysisThe July 8, 2025 interim order named all four Linqto debtors as joint and several borrowers from Sandton Master Fund VI, with a $60 million facility commitment and $10 million interim borrowing limit. The interim collateral package included debtor cash and securities, subject to the professional-fee carve-out. Customer representatives challenged the use of customer-linked securities and Ripple proceeds. ^{1 2}

analysisThe September 16 settlement proposed a $25 million facility, excluded platform securities and their proceeds from DIP collateral, subject to the professional-fee carve-out, and included estate causes of action and avoidance recoveries. The court overruled objections and approved the settlement and Ripple-proceeds motions October 3; the final financing order followed October 6. The plan’s agreement definition prints September 25, 2024, an apparent inconsistency with the 2025 chronology that is preserved without treating it as a genuine 2024 transaction. ^{2 3}

analysisThe term sheet contemplated a liquidating trust holding Liquidshares equity, with new issuer-linked series equity issued to the trust. Liquidshares would remain the securities holder. For customers receiving closed-end fund treatment, securities would first stay with Liquidshares and later move to the fund as the trustee redeemed the corresponding series interests. These transfers depended on implementation, rather than occurring when the term sheet was filed. ¹

analysisThe wind-down trust separately provided beneficial interests for allowed existing equity holders under its residual waterfall; that structure did not promise a guaranteed shareholder recovery. The plan required an Exited Customer Cash Pool, segregated from other money and reserved for allowed exited-customer claims. It also retained a securities holdback for DIP repayment and wind-down costs, with first proceeds paying allowed DIP claims until satisfied. ²

analysisIssuer restrictions, including transfer controls, redemption and first-refusal rights, remained enforceable. Jan Kleipool sought a late election switch, alleging interference with email and postal mail and arguing excusable neglect. The court denied his emergency objection April 21, 2026, finding notices adequately mailed and reasoning that the post-confirmation exchange would fall outside the plan’s securities-registration exemption and prejudice implementation. The ruling decided his request rather than establishing that every election or distribution had occurred. ^{2 3}

analysisLinqto announced operating subsidiary Forge Global, Inc. as the selected liquidating trustee and Van Eck as the selected fund manager in January 2026. The written confirmation order followed February 13. The later complaint named Forge Holdings; Forge disputed appointment and obligations, and its answer says the performance request was withdrawn while damages remained contested. The estate blamed Forge’s refusal for the delay, which Forge denied. The latest retained September 29 account found no effective plan or replacement date in its reviewed filings. The proposed trust ownership and sole-manager changes consequently remain conditional. ^{1 2 3 4 5}

analysisThe confirmation order preserved potential allowance of the customer class claim, additional non-rescission securities damages and objections to those claims. It preserved SEC powers against nondebtors and stated that liquidating debtors receive no discharge. Separate provisions preserved disputed White & Case security rights over Sapien distributions; they did not erase customer or lawyer rights simply because the plan was confirmed. ⁴

analysisKatten advised the Special Subcommittee’s limited inquiry into viable estate claims. Its finding of no worthwhile claims against defined new 2025 officers and directors supported proposed releases; this was not universal exoneration. Reed did not participate in the inquiry, and Kutler did not participate in the new-management phase. Potential claims against other current officers and directors with earlier service were retained. The management incentive was capped and conditional on formation, employment and a fund market premium exceeding the specified 1.1 ratio; no payout is established. ⁴