TechFlow news, according to CryptoSlate, an FTX creditor group led by Sunil Kavuri is opposing the reorganization plan proposed by FTX's bankruptcy administrators. In court filings submitted on June 5, creditors pointed out that the plan fails the best interests test, contains terms contrary to creditors' interests, and overlooks property rights issues.
Creditors stated that cash payouts would require customers to pay taxes on the funds received. They recommend in-kind distributions instead to avoid tax implications. Creditors further urged that FTX must update its disclosure statement regarding the settlement with the Internal Revenue Service (IRS). Under the settlement, the IRS will receive a $200 million priority claim within 60 days of approval. An additional $685 million in subordinated priority claims will be paid only after customers are fully compensated.
On May 7, FTX’s bankruptcy administrators announced a reorganization plan providing full cash repayment to creditors. Under the plan, creditors with claims below $50,000 would qualify for 118% compensation within 60 days of court approval. Other non-government creditors would also receive full repayment along with interest compensation of up to 9%.
