FTX, the bankrupt cryptocurrency exchange, is moving closer to reorganizing after receiving substantial support for its revised Plan of Reorganization. According to a press release, from all the creditors who voted, over 95% of them favored the plan.
John J. Ray III, FTX’s CEO and Chief Restructuring Officer, praised the overwhelming support, highlighting it as a sign of confidence in the reorganization efforts.
John J. Ray III, said, “The Plan’s innovative structure provides for the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors and resolves complex disputes with dozens of governmental and private stakeholders.”
The plan aims to repay 100% of bankruptcy claims and interest to non-governmental creditors, potentially avoiding protracted legal disputes and speeding up the repayment process.
The plan outlines a significant asset recovery effort, with an estimated $14.5 billion to $16.3 billion in assets to be collected, converted to cash, and distributed. This includes assets from FTX’s Chapter 11 debtors and various related entities, including those in the Bahamas.
Additionally, the plan proposes paying interest of up to 9% to primary creditors from the start of Chapter 11 proceedings until the date of distribution. The final approval hearing for the reorganization is scheduled for October 7, 2024, when final vote results will be revealed.
Amidst these efforts, FTX faces ongoing legal challenges, including a 25-year prison sentence for former CEO Sam Bankman-Fried and a hefty $11 billion fine for financial fraud. The company and Alameda Research have also settled with the CFTC to pay back $12.7 billion to creditors.
As FTX navigates these turbulent waters, the reorganization plan represents a critical step toward resolution and recovery for its creditors.
