The decision of the Bankruptcy Court for the District of Delaware confirms the second bankruptcy plan of the FTX liquidators. This plan was presented in September and obtained the approval of 96% of creditors with voting rights.
As detailed in the plan, Clients can receive cash rebates of 118% of the value of their holdings at the time when FTX filed for bankruptcy although some could receive up to 140%. Specifically, the plan plans to distribute between 14,700 yu$s16,500 million to 98% of creditors. This figure represents the percentage of creditors with claims of less than $50,000.
Although this figure is more than what creditors expected to receive two years ago, The amounts will not match the gains that bitcoin (BTC) and other cryptocurrencies experienced over the past two years.
How FTX recovered what was lost
“The Court’s confirmation of our Plan is a significant milestone on our path to distributing cash to customers and creditors. We are prepared to return 100% of the amounts claimed bankruptcy plus interest to non-governmental creditors through what will be the largest and most complex asset distribution of a bankruptcy estate in history,” said John J. Ray III, CEO and chief restructuring officer of FTX.
Even though FTX’s coffers were virtually empty when Ray III took over, the company managed to recover “billions of dollars” of lost assets. According to various information, FTX only had 105 bitcoins from its clients of the almost 100,000 that had been deposited. Likewise, the liquidators also sold their stake in the artificial intelligence (AI) company Anthropic, which netted them nearly US$900 million.
Likewise, the court rejected objections from companies such as Celsius or Layer Zero that debts be distributed in cash instead of cryptocurrency.s. According to FTX lawyers, purchasing the correct amount of cryptocurrency owed to creditors would be impossible at current prices.
Although in-kind cryptocurrency distributions are ruled out, FTX lawyers said they were still considering the possibility of using stablecoins. In this sense, the liquidators have confirmed that they are in talks with at least four companies that could manage such distribution if necessary. lhe Securities and Exchange Commission (SEC) has opposed this aspect of the refund plan.
The bankruptcy of FTX
FTX filed for bankruptcy in November 2022, destroying billions of investors’ dollars. Later in December, the CFTC filed a lawsuit against FTX and Alameda, alleging that both committed fraud and made false statements by marketing themselves as a “digital commodity asset platform.”
It is worth remembering that Sam Bankman-Fried, founder of both companies, was sentenced in March to 25 years in prison and to repay $11 billion for charges related to fraud and money laundering. He had previously been found guilty of seven counts of fraud, conspiracy and money laundering. Bankman-Fried asked for a retrial and accused the judge handling the case of being unfairly biased.
Source: Ambito
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