Cryptocurrency exchange FTX announced on Tuesday that it has submitted a revised restructuring plan and disclosure report to the court. According to the plan, 98% of creditors will receive at least 118% of their recognized claim in cash within 60 days of the plan taking effect, while other creditors will receive full repayment of their principal and compensation for the time value of their investments, amounting to billions of dollars.
FTX CEO John J. Ray III stated in a press release that creditors with recognized claims below $50,000 will be eligible to receive approximately 118% of their claim amount after court approval, with repayment to occur within 60 days of the plan’s effectiveness.
The latest restructuring plan aims to provide “centralized distribution” to FTX customers and creditors affected by the company’s closure in 2022, regardless of where their assets were located at the time. FTX estimates that the total cash available for distribution is between $14.5 billion and $16.3 billion, pending final determination and approval by the US bankruptcy court.
According to Bloomberg, FTX owes customers and other non-government creditors approximately $11 billion. While all debts will be fully repaid with interest, equity holders will not receive any remaining funds.
Earlier this year, FTX had around $6.4 billion in cash available for repayment, with the increase primarily due to the rising prices of various cryptocurrencies, including the token SOL, native to the Solana blockchain, which was previously strongly supported by convicted FTX founder Sam Bankman-Fried. FTX noted in its press release that it had monetized a highly diverse range of assets, with a majority coming from investments or litigation claims held by Alameda Research and FTX Ventures, including shares in the artificial intelligence company Anthropic.
The details of the proposal to distribute cash to creditors and conclude the bankruptcy protection case were outlined in a document submitted by FTX’s restructuring advisors on Tuesday. The document, called the disclosure report, aims to assist creditors in voting on the proposed repayment plan. The results of the vote will be considered by US Bankruptcy Court Judge John Dorsey when deciding whether to approve the restructuring plan later this summer. A hearing on the disclosure report and voting procedures is scheduled for the end of June.
References: FTX Press Release, The Block, Bloomberg
