FTX releases restructuring plan, hints at rebooted offshore exchange
FTX has outlined its intended reorganization plan, which will categorize claimants of the bankrupt exchange into specific classes and pave the way for the exchange to become operational as an offshore entity.
Dockets filed on July 31 include a draft plan of reorganization that outlines the company’s intended path to settle an “exceptionally large and complicated collection of claims.”
There are a total of 13 different classes of claims, including specific brackets for FTX.com customer entitlement claims, U.S. customer claims and nonfungible token (NFTs) customer claims.
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The global settlement will involve the valuation of claims in U.S. dollars on a valuation methodology prepared by FTX that has yet to be approved by the bakruptsy court, including disputes over assets held on the FTX.com and FTX US exchanges.
FTX plans to identify three primary recovery pools that will correspond with segregated assets attributable to FTX.com customers, FTX US customers and assets that the company contends are not attributable to the two defunct exchange arms.
Users that held NFTs will also have their own separate classification. NFTs are set to be returned to applicable customers unless they were “destroyed” or lost. In that scenario, their claims would shift to Class 4A or 4B, as outlined in the screenshot above.
The document features recognition of special “shortfall” claims by the two FTX exchange organizations against this third pool of general assets. This is intended to “compensate” the exchanges for the unauthorized borrowing and misappropriation of assets that former CEO Sam Bankman-Fried and his close associates are accused of carrying out.
The filing also outlines the intent to cancel intercompany claims as well as the “extinguishment of FTT claims.” This specific clause hints that holders of FTX Token (FTT) will not be compensated at all for their token holdings. The value of FTT collapsing played a pivotal role in the collapse of FTX in 2023.
The final section of the proposed plan covers the intent to liquidate the estates of FTX to payout distributions to customers and creditors in cash. However, a clause notes that customers may be offered voluntary elections in connection “with a restart of an offshore exchange.”
This would see a provision for specific creditors to opt for a share of equity, tokens and other interests in a potentially rebooted offshore FTX exchange.
Under bankruptcy proceedings, FTX has sued Bankman-Fried and other implicated directors in an attempt to recover over $1 billion in alleged misappropriated funds. The July 20 complaint names Bankman-Fried as a defendant alongside former Alameda Research CEO Caroline Ellison, FTX co-founder Zixiao “Gary” Wang and former FTX engineering director Nishad Singh.
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