Cryptocurrency exchange FTX announced on Tuesday (7th) 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 debt in cash within 60 days after the plan takes effect, while other creditors will receive full repayment of their principal and compensation for the time value of billions of dollars in investments.
John J. Ray III, CEO of FTX, stated in a press release that creditors with recognized claims below $50,000 will be eligible to receive approximately 118% of their debt amount after court approval, with repayment scheduled to take place within 60 days after the plan takes effect.
The latest restructuring plan aims to provide “centralized distribution” to FTX customers and creditors affected by the company’s collapse in 2022, regardless of where their assets were at the time. FTX estimates that the total amount of 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 around $11 billion. Court documents show that while all debts will be fully repaid with interest, equity holders will not receive any remaining funds.
Earlier this year, FTX had approximately $6.4 billion in cash available for repayment, with the main reason for the increase in funds being the general rise in prices of various cryptocurrencies, including the token SOL supported by convicted FTX founder Sam Bankman-Fried. FTX stated in its press release that it has monetized a highly diverse range of assets, most of which come from investments or litigation claims held by Alameda Research and FTX Venture, including shares of the artificial intelligence company Anthropic.
Details of the proposal for distributing cash to creditors and ending the bankruptcy protection case were outlined in a document submitted by FTX’s restructuring advisors on Tuesday. The document, called a disclosure report, is intended to assist creditors in voting on the proposed repayment plan. The voting results will be taken into consideration by Judge John Dorsey of the US bankruptcy court 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
