FTX and its affiliates have moved closer to finalizing their reorganization plan, which has received substantial backing from creditors.
Recent reports show that over 95% of voting creditors support the updated plan, representing 99% of the claims by value.
John J. Ray III, FTX’s CEO and Chief Restructuring Officer, commended the overwhelming support, highlighting it as a positive step toward restructuring. The plan aims to potentially repay full amounts owed to non-governmental creditors and resolve legal disputes efficiently.
The reorganization plan outlines the recovery and distribution of nearly all assets tied to the bankruptcy, estimated between $14.5 billion and $16.3 billion. This includes assets from FTX’s Chapter 11 debtors and entities like the Joint Official Liquidators of FTX Digital Markets Ltd.
Interest payments of up to 9% are also proposed for major creditors from the start of Chapter 11 proceedings until distributions occur. The confirmation hearing for this plan is set for October 7, 2024.
Alongside restructuring, FTX faces legal challenges, including a 25-year prison sentence and $11 billion fine for former CEO Sam Bankman-Fried. Additionally, FTX and Alameda Research have agreed to a $12.7 billion settlement with the CFTC.
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