Court approves FTX reorganization plan, here’s what’s next for creditors

FTX has reached an important milestone in its bankruptcy proceedings, as the United States Bankruptcy Court for the District of Delaware has officially approved the company’s plan of reorganization.

This comes nearly two years after the crypto exchange’s historic November 2022 collapse.

FTX bankruptcy reorganization plan approved

The confirmed plan, which received overwhelming support from creditors, is estimated to return an average of 119% of the value of claims, with some creditors able to receive up to 140% in cash. Approximately 98% of FTX creditors by amount are scheduled to receive their refunds within 60 days of the effective date of the plan.

According to the official press release, FTX estimates the total recovery to be between $14.7 billion and $16.5 billion, due to assets recovered from various entities, including the US Department of Justice and international regulators.

Commenting on the latest development, John J. Ray III, CEO and Chief Restructuring Officer of FTX, said:

“Today’s achievement is only possible because of the expertise and tireless work of the team of professionals supporting this case, who have recovered billions of dollars by rebuilding FTX’s books from the ground up and from there pooling assets around the world. It also reflects the strong collaboration we’ve had with governments and agencies around the world who share our goal of mitigating FTX experts.”

Ray III, who took over from former CEO Sam Bankman-Fried, also said the estate is willing to return 100 percent of the bankruptcy claim amounts plus interest to non-government creditors through of what he considers to be the “biggest and most complex”. ” distribution of bankruptcy estate assets in history.

He added that the estate is working to finalize agreements to distribute funds to creditors in more than 200 jurisdictions worldwide.

To facilitate this, specialist agents are being hired to ensure that recoveries are delivered safely and on time to customers worldwide.

Events after the FTX Crash 2022

FTX declared bankruptcy at the end of 2022 after its collapse. In November 2023, Sam Bankman-Fried was convicted of seven criminal charges, including wire fraud and conspiracy, and sentenced to nearly 25 years in prison.

In May, the company’s co-CEO, Ryan Salame, was sentenced to 90 months in prison.

Most recently, Caroline Ellison, CEO of Alameda, FTX’s sister company, was sentenced to two years for her role in the company’s downfall. Former FTX executives Gary Wang and Nishad Singh are awaiting sentencing. Singh is scheduled to be sentenced later this month, while Wang’s sentencing will take place at the end of November.

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