Akin and GXD Labs Secure $85 Million-plus Victory in Rhodium Enterprises Bankruptcy

Precedent-setting win delivers tens of millions to creditors; Bankruptcy Court authorizes one of the largest-reported "substantial contribution" awards.

Published on Feb. 13, 2026

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Akin and GXD Labs, a subsidiary of Atlas Grove Partners, announced a pivotal win for early investors in the now-defunct Bitcoin miner Rhodium Enterprises Inc. Rhodium filed for bankruptcy in 2024 with nearly $87 million in obligations to holders of Simple Agreements for Future Equity (SAFEs). Akin and GXD Labs successfully argued that the SAFE holders had debt claims, not mere equity interests, and were entitled to payment priority ahead of common stock. As a result, SAFE parties have the opportunity to collectively recover over $85 million, more than 98% of the aggregate SAFE claims. The Court also authorized an $8.5 million "substantial contribution" payment, one of the largest such awards ever reported.

Why it matters

This case sets an important legal precedent around the status of SAFE agreements, which have become increasingly common in early-stage startup funding. The victory ensures that SAFE investors in Rhodium will receive a substantial recovery, rather than being left with pennies on the dollar. The substantial contribution award also highlights the significant impact Akin and GXD Labs had in achieving this outcome for the bankruptcy estate.

The details

Key Rhodium stakeholders had argued that the SAFEs were worth only pennies on the dollar, due in part to a lack of legal precedent around these novel financial instruments. However, Akin and GXD Labs successfully argued that the SAFE holders had debt claims, not mere equity interests, and were entitled to payment priority ahead of common stock. This resulted in SAFE parties having the opportunity to collectively recover over $85 million, more than 98% of the aggregate SAFE claims.

  • Rhodium filed for bankruptcy in August 2024.
  • The Bankruptcy Court authorized the $8.5 million "substantial contribution" payment in February 2026.

The players

Akin

A law firm that represented the SAFE holders in the Rhodium Enterprises bankruptcy case.

GXD Labs

A wholly-owned subsidiary of Atlas Grove Partners that collaborated with Akin on the Rhodium Enterprises case.

Rhodium Enterprises Inc.

A now-defunct Bitcoin miner that filed for bankruptcy in 2024 with nearly $87 million in obligations to SAFE holders.

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What they’re saying

“We are pleased that our efforts, in collaboration with Akin, have resulted not only in a significant monetary award for the creditors in this case, but also in a matter-of-first-impression ruling that will impact other current and future SAFE holders.”

— R Christian Wyatt, Co-Founder and Managing Partner, GXD Labs (PRNewswire)

“Our work with the GXD Labs team on this matter enabled us to find a way to compensate those who invested with Rhodium. In many cases, a bankruptcy asset valued at zero would remain uncollectable, but here, SAFE holders may get close to a full recovery.”

— Mitch Hurley, Partner, Akin (PRNewswire)

“In addition, we hope that the precedent set around SAFEs will benefit future investors.”

— Mitch Hurley, Partner, Akin (PRNewswire)

What’s next

The Bankruptcy Court's ruling on the SAFE claims and the substantial contribution award will likely have a significant impact on how similar cases involving SAFE agreements are handled in the future.

The takeaway

This case demonstrates the importance of establishing legal precedents around new financial instruments like SAFEs, which have become increasingly common in early-stage startup funding. The victory ensures that SAFE investors can recover a substantial portion of their investments, rather than being left with minimal returns, and sets a positive example for future SAFE holders.