TechFlow news — According to Bloomberg, FTX and its affiliated debtors filed a revised reorganization plan and disclosure statement on Tuesday with the U.S. Bankruptcy Court in Delaware. The plan is expected to distribute nearly all of FTX’s assets at the time of its November 2022 collapse to customers and other creditors worldwide.
FTX estimates that the total value of property collected, converted into cash, and available for distribution will range between $14.5 billion and $16.3 billion. This amount includes assets controlled by the Chapter 11 debtors, as well as those managed by the Joint Official Liquidators of FTX Digital Markets, Ltd. (Bahamas), the Bahamas Securities Commission, and the Joint Official Liquidators of FTX Australia. FTX reportedly owes approximately $11 billion to customers and other non-governmental creditors. This additional cash will be used to pay interest to over 2 million of the company’s customers—an unusual outcome, as creditors in U.S. bankruptcy cases typically recover only a small fraction of the face value of their claims.
Court documents show that while all debts will be repaid in full with interest, shareholders will receive nothing. Depending on the type of claim held, certain creditors may recover up to 142% of their claim amount. However, the vast majority of customers are likely to receive 118% of the amount they held on the FTX platform on the day FTX filed for bankruptcy protection. FTX has also proposed establishing a fund to repay some creditors, including those who provided cryptocurrency loans to FTX—funds that would otherwise go to government regulators. As FTX moves into the final stages of its bankruptcy proceedings, distributions could begin within months.
