TechFlow news — On November 22, FTX Trading Ltd. and its affiliated debtors announced that FTX is nearing the final prerequisites for court approval of its bankruptcy reorganization plan, paving the way for FTX to begin distributing recovery payments to creditors and customers. The effectiveness of the reorganization plan means the court-approved restructuring plan officially commences implementation.
This typically signifies that the bankrupt company has completed key steps in the restructuring process, reached agreements with creditors and other stakeholders, and is now prepared to carry out actual debt repayments and asset distributions according to the plan. John J. Ray III, CEO and Chief Restructuring Officer of FTX, stated: "We are pleased to announce that distributions will begin in early 2025. This timeline reflects the experience and sustained efforts of the debtor team, which has already recovered billions of dollars on behalf of FTX’s creditors and customers. As we continue taking steps to maximize recoveries, we are actively advancing arrangements with distribution agents to return recovery payments to creditors and customers as quickly as possible."
FTX provided the following updates regarding the expected distribution timeline:
1. In early December, the debtors expect to finalize arrangements with specialized distribution agents who will assist FTX in making global customer distributions within supported jurisdictions. At that time, the debtors will provide instructions guiding customers to set up approved accounts on the existing customer portal.
2. By the end of December, the debtors anticipate announcing the exact effective date following a court order approving the amount reserved for disputed claims, which is a prerequisite for distributions under the confirmation order.
3. The debtors currently expect the bankruptcy reorganization plan to become effective in early January 2025. Under the confirmation order, the first distributions will occur within 60 days of the effective date and will be made to convenience class claimants whose claims are allowed under the plan. The record date for the initial distribution will be the same as the effective date.
