According to Bloomberg, a group of investment firms has been purchasing FTX customers’ claims since the cryptocurrency exchange FTX went bankrupt at the end of 2022. These firms include Attestor Limited, a UK distressed debt investment firm, Baupost Group, Farallon Capital, and Oaktree Capital.
During a recent court hearing, an FTX lawyer stated that FTX is planning to fully repay its creditors. This means that investors who purchased the claims for only 10% of their face value after the exchange collapsed will be able to receive the full amount of their claims.
Documents submitted to the court at the time showed that Attestor Limited held around $394 million worth of FTX claims at the end of January. This was the largest holding among several distressed debt investments. According to pricing data from broker Cherokee Acquisition, Attestor has been purchasing FTX claims since at least March 2023 at a price of around 20% of face value.
Source:
Bloomberg
According to reports, many funds have invested through entities with different names, and insiders have confirmed their identities. Spokespersons for Attestor, Farallon, Oaktree, and Baupost declined to comment.
In typical billion-dollar bankruptcy cases, unsecured creditors either have to wait for years to receive repayment or try to sell their claims to investors specialized in extracting value from bankrupt companies. Regardless of the method chosen, creditors usually recover significantly less than the amount owed to them. However, according to advisors handling the company’s bankruptcy case, FTX is one of the few cases where small creditors expect to fully recover their debts.
Related report: “Rumors: FTX restructuring team may pay interest to creditors, with a recovery rate expected to exceed 100%.”
