CDS Crypto News FTX Debtors to Propose Amended Plan for Creditor Recovery in December
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FTX Debtors to Propose Amended Plan for Creditor Recovery in December

FTX Debtors Set to File Amended Proposal for Creditor Recovery by Mid-December

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FTX Debtors to Propose Amended Plan for Creditor Recovery in December

Crypto News – On an early Tuesday, FTX Debtors revealed their intention to submit an amended proposal, slated for a mid-December filing if approval is granted. The proposal aims to restore up to 90% of creditor holdings that were present at the cryptocurrency exchange prior to its collapse in November.

The oversight of the bankruptcy proceedings lies with the debtors’ group, responsible for formally presenting the plan to a U.S. Bankruptcy Court by December 16, 2023, for review.

FTX faced a significant downfall following revelations about its financial health published by CoinDesk last year. The newly appointed CEO, John J. Ray III, criticized the financial controls within the company, while founder Sam Bankman-Fried is facing criminal charges in an ongoing trial.

Ftx Debtors To Propose Amended Plan For Creditor Recovery In December

The debtors’ proposal suggests categorizing the missing customer assets into three distinct pools based on the circumstances at the initiation of the Chapter 11 cases: segregated assets for FTX.com customers, assets for FTX.US customers, and a “General Pool” for other assets.

According to the proposal, customers with a preference settlement amounting to less than $250,000 can accept the settlement without any reduction in claim or payment. The preference settlement constitutes 15% of customer withdrawals made on the exchange nine days before its closure.

Creditors are expected to receive a “Shortfall Claim” against the general pool, correlating with the estimated value of missing assets at their respective exchanges—approximately nearly $9 billion for FTX.com and $166 million for FTX.US, the exchange’s U.S. arm.

However, the potential for complete recoveries might be affected by various factors, including taxes, government claims, token price fluctuations, and more.

Furthermore, the debtors hold the right to exclude individuals such as insiders, affiliates, and customers from the settlement, particularly those who were aware of the commingling and misuse of customer deposits and corporate funds or those who altered their KYC information to expedite withdrawals when they were halted. The debtors clarified that the payouts for these customers might not accurately reflect the fair value of the FTX Debtors’ claims.

Ftx Debtors To Propose Amended Plan For Creditor Recovery In December
Sources:Coin Desk

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