Linqto, Inc. said Wednesday that a Houston bankruptcy judge has shut down a coordinated push by a group of customers to claw back Circle shares outside the company's court-approved Chapter 11 plan, a ruling the fintech platform's leadership is calling a win for customers and creditors alike.
According to Business Wire, U.S. Bankruptcy Judge Alfredo R. Perez ruled that the request to turn over Circle shares under Section 542 of the bankruptcy code was improper and procedurally defective. Linda P. Jones, who had moved to consolidate all pending customer motions seeking the return of Circle shares outside the confirmed plan process, lost the fight after the court denied the consolidated motions following a period under advisement.
Circle Shares Saga Started With a February Motion
Per the same announcement, Jones filed the first in a series of customer motions seeking the return of alleged non-estate property in February, and the court approved her request to consolidate all of the related filings on March 27. Linqto's debtors opposed the turnover motion, arguing the question of what counted as estate property had already been decided, while the Unsecured Creditors Committee joined that opposition.
The same filing shows Linqto submitted formal opposition papers in March and again in May, and that the court held a hearing on the consolidated motions on June 22 before taking the matter under advisement. In the announcement, Linqto CEO Dan Siciliano said the ruling is a win for both customers and creditors, adding that it lets the company refocus on resolving its remaining open issues and exit bankruptcy as quickly as possible.
A Rocky 13 Months Since the Chapter 11 Filing
Linqto Texas, LLC and three affiliated debtor entities filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas on July 7, 2025, under case number 25-90186, according to Epiq 11, the court's claims agent. The filing came after Linqto abruptly shut down its trading platform on March 13, 2025, once new executive leadership that replaced founder William 'Bill' Sarris in January 2025 uncovered widespread securities law violations, governance failures and noncompliant corporate structures dating back to 2020, as reported by FinTech Weekly.
Judge Perez confirmed Linqto's Chapter 11 Plan of Reorganization on February 6, with support from more than 95 percent of voting creditors, per Sullivan & Cromwell. The confirmed plan set up a dual recovery framework letting customers either keep indirect interests in the private companies through a liquidating trust or take shares in a publicly listed closed-end fund instead, according to Orrick.
Before the restructuring, Linqto's investment vehicle LiquidShares held securities in 111 private companies valued at more than $500 million, including roughly 4.7 million shares in blockchain firm Ripple Labs, Financier Worldwide reported. Sandton Capital Partners agreed to provide up to $60 million in debtor-in-possession financing to keep the platform running through the court-supervised process, according to KFGO.
Other Legal Battles and a Trustee Standoff
The Circle shares dispute isn't the only fight Linqto has faced since its collapse. Creditor John Deaton filed a class-action lawsuit on July 9, 2025, on behalf of roughly 4,000 customers alleging former CEO Bill Sarris misled investors about how their assets were structured, Business Wire reported. Shareholder group Sapien Group USA, LLC separately tried to move the bankruptcy from Texas to Delaware that same month, but Judge Perez denied the request and kept the case in Houston, according to FinTech Weekly. Linqto also remains under scrutiny from the SEC and the U.S. Attorney's Office for the Southern District of New York, per Sullivan & Cromwell.
Even with Wednesday's ruling, Linqto's exit from bankruptcy isn't a sure thing. Implementation of the confirmed reorganization plan hit a snag last month when designated liquidating trustee Forge Global Holdings refused to execute the trust agreement over compliance concerns, prompting emergency court status conferences, according to ElevenFlo. That standoff, layered on top of the ongoing federal investigations, suggests Siciliano's stated goal of wrapping up the case quickly still faces real hurdles.
