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FTX Updates Bankruptcy Plan, Estimates $14.5-$16.3 Billion for Creditor Payouts

FTX Updates Bankruptcy Plan, Estimates $14.5-$16.3 Billion for Creditor Payouts

May 8, 2024

FTX Updates Bankruptcy Plan, Estimates $14.5-$16.3 Billion for Creditor Payouts

FTX has filed an amended reorganization plan with a U.S. bankruptcy court on Tuesday, outlining its strategy to pay back creditors and customers. According to the documents submitted, FTX estimates that it will have between $14.5 billion to $16.3 billion available for distribution to its creditors.

The anticipated figure is based on the monetization of various assets, primarily those held by Alameda Research—a cryptocurrency hedge fund operated by Sam Bankman-Fried—and FTX Ventures businesses, in addition to potential litigation claims. "The amount for distribution includes assets under the control of the chapter 11 debtors, as well as those controlled by liquidators of FTX Bahamas Digital Markets, Bahamas Securities Commission, liquidators of FTX's Australia unit, the United States Department of Justice (DOJ) and several private parties," FTX stated in its announcement.

The amended plan also introduces a strategy for settling outstanding cases, many of which are pending court approval. FTX has reached agreements with key stakeholders, aiming to expedite the repayment process for its creditors.

A notable feature of the plan is the creation of a "convenience class" for creditors with claims of $50,000 or lower. This provision is expected to ensure that the majority of these creditors could receive about 118% of their claim amounts within two months, pending court endorsement of the plan.

FTX CEO John Ray commented on the proposal, saying, "We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors." As of February, FTX reported having $6.4 billion in cash.

The news comes after FTX's founder, Sam Bankman-Fried, was sentenced to 25 years in prison earlier this year for misappropriating $8 billion from customers.

The current state of the reorganization plan remains subject to court approval, and the precise timeline for creditor repayment is yet to be determined.

Reuters Article


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