FTX Trading, the renowned cryptocurrency exchange known as FTX.com, and its associated debtors have delivered encouraging news to their creditors amidst ongoing bankruptcy proceedings. The Reorganization Plan, recently unveiled, predicts that approximately 98% of FTX’s creditors will receive a minimum of 118% of their permitted claims in cash. Payments are anticipated to be made within 60 days of the plan’s approval.
For the remaining creditors, they will be eligible to receive 100% of their claims along with additional compensation to account for the time value of their investments. This comprehensive plan is now awaiting approval from the U.S. Bankruptcy Court. It was filed 17 months after FTX declared bankruptcy under Chapter 11 in Delaware.
The primary objective of the proposal is to allocate nearly all of FTX’s available assets at the time of its collapse, which occurred in November 2022. The estimated value of recovered and liquidated assets available for distribution falls within the range of $14.5 billion to $16.3 billion. These assets originate from a variety of sources, including Chapter 11 debtors and various liquidators.
John J. Ray III, the CEO and Chief Restructuring Officer of FTX, expressed his satisfaction with the collaboration received during the recovery process. He stated, “We are delighted to propose a Chapter 11 plan that envisions the complete return of the bankruptcy’s value, along with interest, for non-governmental creditors.” Ray also extended his gratitude to all FTX customers and creditors for their patience throughout this extensive process.
This plan is particularly remarkable considering the challenging circumstances in which FTX found itself during its bankruptcy. The company faced a significant deficit in Bitcoin and Ethereum holdings at the time. Nonetheless, FTX concentrated its efforts on maximizing the recovery of other assets to ensure that creditors were fairly compensated.
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