Kevin

Strong

Show

<p>The proposed restructuring plan of FTX, the defunct cryptocurrency exchange, has been welcomed by the exchange’s creditors. In a recent filing made, over 94% of the FTX Dotcom customer class endorsed the plan. This shows that there is much support for the proposed move.</p> 
<h2 class="wp-block-heading" id="h-majority-of-ftx-dotcom-creditors-support-plan"><strong>Majority of FTX Dotcom Creditors Support Plan</strong></h2> 
<p>On Monday, Kroll Restructuring Administration that is in charge of the voting procedure stated that 94.48% of FTX Dotcom creditors who cast their ballots agreed to the reorganization plan.</p> 
<p>These creditors amounting to $6.83 billion claims are the biggest group of creditors. It proposes to pay back most creditors with cash at a level of 118 percent of their claims.</p> 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper"> 
  <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
   <p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/FTX?src=hash&amp;ref_src=twsrc%5Etfw">#FTX</a> update<br>– Court Hearing and Settlement: There was a court hearing scheduled for October 7, 2024, regarding the approval of settlements and the broader reorganization plan for FTX. This hearing was crucial for determining when creditors might start receiving repayments, with… <a href="https://t.co/Ms9bOtrUFh">https://t.co/Ms9bOtrUFh</a></p>— Jim Rohn (@Jim_Rohn_) <a href="https://twitter.com/Jim_Rohn_/status/1841037240576983532?ref_src=twsrc%5Etfw">October 1, 2024</a>
  </blockquote>
  <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
 </div>
</figure> 
<p>This vote comes after early August. The company announced that&nbsp;<a href="https://www.thecoinrepublic.com/2024/09/04/ftx-to-distribute-16-billion-to-creditors-another-mt-gox-like-selloff-ahead/">preliminary support showed</a>&nbsp;that more than two-thirds of all invited claims voted. Two of the creditor classes failed to return their ballots. According to the bankruptcy code, are deemed to have voted in favor of the plan.</p> 
<h2 class="wp-block-heading" id="h-u-s-creditors-and-other-classes-also-show-strong-support"><strong>U.S. Creditors and Other Classes Also Show Strong Support</strong></h2> 
<p>Besides the FTX Dotcom creditors, the U.S. customer entitlement claims class also voted in favor of the reorganization. As many as 89.1% of creditors in the US voted in favor of the plan. The total value of the claims standing at $60.99 million.</p> 
<p>Furthermore, 95.88% of creditors within the “dotcom convenience claims” class that stand for $223.59m in claims also supported the plan.</p> 
<p>These figures reflect a very robust support across all the classes of the creditors. The move is a significant milestone in the process of wrapping up the reorganization of the cryptocurrency exchange. They went bankrupt in 2022 amid accusations of embezzlement and corruption.</p> 
<h2 class="wp-block-heading" id="h-creditor-repayments-expected-to-begin-after-court-approval"><strong>Creditor Repayments Expected to Begin After Court Approval</strong></h2> 
<p>Having received the approval of all the creditors, the next phase of the process is the court hearing on the 7th of October. In this meeting the reorganization plan will be discussed. </p> 
<p>If the court adopts the plan, the plan will go into effect and creditors are going to receive their payments.</p> 
<p>According to the plan, around 98% of the creditors are expected to get at least 118% of the amount. The amount they are owed will be received cash.</p> 
<p>However, the total repayment amounts are determined as at the date of&nbsp;<a href="https://www.thecoinrepublic.com/2024/09/30/ftx-token-ftt-skyrockets-amid-rumors-of-16-billion-payout/">FTX’s bankruptcy</a>&nbsp;filing on 9th November 2022 in relation to each cryptocurrency that is involved. </p> 
<p>Some of the creditors have complained that the repayment schedules have not adequately taken into account the increased value of their assets since then. Still, the fact that many creditors signed the plan shows that more people consider it as a way of getting their money back.</p> 
<h2 class="wp-block-heading" id="h-preferred-shareholder-fund-sparks-concerns"><strong>Preferred Shareholder Fund Sparks Concerns</strong></h2> 
<p>However, some of the creditors expressed concerns following a recent disclosure of a fund for preferred shareholders of FTX. </p> 
<p>A filing made on September 28 revealed that about $230 million, which is 18% of forfeiture proceeds, will be allocated to some of the shareholders. This fund was set up after the voting had completed. This led to some dissatisfaction from the creditors that claimed that the information was disclosed at the wrong time.</p> 
<p>Some of the&nbsp;<a href="https://www.thecoinrepublic.com/2024/09/14/sam-bankman-fried-appeals-conviction-ftx-unstakes-1b-in-solana/">cryptocurrency exchange</a>&nbsp;preferred shareholders are Sequoia Capital, Temasek. As well as other venture capital firms and investors like Kevin O’Leary and Robert Kraft. </p> 
<p>Despite the fact that preferred shareholders, in most cases, rank lower than creditors, there has been criticism over the announcement with some creditors complaining of been disadvantaged by the last minute addition to the plan.</p> 
<p>The next hearing of FTX’s reorganization plan will be made to decide whether the plan will proceed or not. </p> 
<p>Speculations had been made that creditor repayments would commence on September 30 but this was not the case. The decision on the plan is final to be made on the 7 th of October hearing where all the objections if any will be presented.</p> 
<h2 class="wp-block-heading" id="h-doj-forfeiture-and-preferred-shareholder-settlement"><strong>DOJ Forfeiture and Preferred Shareholder Settlement</strong></h2> 
<p>As part of current advancements, FTX has also given an update on the proposed settlement with preferred shareholders. </p> 
<p>In the statement shared on October 1, FTX announced that all the assets held by the company would be returned to the creditors under the Chapter 11 plan. However, the assets seized from FTX insiders during criminal proceedings are being distributed by the U.S. Department of Justice (DOJ).</p> 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper"> 
  <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
   <p lang="en" dir="ltr">(1/3) The FTX Debtors are providing an update on the proposed settlement with the preferred shareholders. FTX will be returning 100% of the assets under FTX’s control to creditors in the Ch. 11 plan. The DOJ is in control of the distribution of assets forfeited through the…</p>— FTX (@FTX_Official) <a href="https://twitter.com/FTX_Official/status/1840864050709766203?ref_src=twsrc%5Etfw">September 30, 2024</a>
  </blockquote>
  <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
 </div>
</figure> 
<p>The DOJ has identified the preferred shareholders as victims along with the creditors which has resulted in dual claims concerning the proceeds that where forfeited. Both FTX and the preferred shareholders have interests in these assets that are at cross purposes. </p> 
<p>Although the DOJ has the final word on how these conflicting claims will be addressed, FTX pointed out that the proposed settlement is intended to provide a reasonable outcome for both parties and avoid the expense of protracted legal proceedings.</p> 
<p>The settlement is expected to be helpful, assuming it is approved by the DOJ, in explaining how the forfeited assets will be divided between the bankruptcy estate’s creditors and preferred shareholders.</p> 
<p>The post <a href="https://www.thecoinrepublic.com/2024/10/01/ftx-reorganization-receives-overwhelming-creditors-support/">FTX Reorganization Receives Overwhelming Creditor’s Support</a> appeared first on <a href="https://www.thecoinrepublic.com">The Coin Republic</a>.</p>

FTX Reorganization Receives Overwhelming Creditor’s Support

Table of Contents

Thecoinrepublic.com

Other articles published on Oct 1, 2024

Gemini to Close All Canadian Accounts by End of 2024

Analysts Predict Price Movements for Key Coins

Crypto Expert Predicts 61% Cardano Crash, Urges Massive ADA Short

A Decade of Leadership Ends as Jerry Brito Leaves Coin Center

Shiba Coin and Render Coin Price Projections: What Bitgert’s Big Month Might Mean for These Coins

Coinbase to Introduce Proof of Reserves for Bitcoin Wrapper, Addressing Transparency Concerns

Join our free newsletter for daily crypto updates!