FTX Hearing Set for October 7: Key Details on the Payout Process

The court proceedings don't end on October 7. According to reports, three additional hearings are scheduled for October 22, November 20, and December 12. These hearings will discuss consolidating multiple claimants into unified categories, ensuring a smoother payout process.

The key objective is to streamline the distribution of assets and prevent delays in disbursing funds to creditors. 

The Chapter 11 Plan: A Path to Payouts

FTX’s reorganization plan promises substantial returns to its creditors, with some receiving up to 118% of their claims. The total value of claims is estimated at $6.83 billion, which will be paid out in cash.

This plan has gained overwhelming support, with over 94% of creditors, particularly those from the FTX(.)com offshore platform, voting in favor of it, according to an Oct. 1 CoinDesk report. 

However, two creditor classes did not submit ballots during the voting process and are presumed to accept the plan. This means the vast majority of creditors have agreed to the terms, giving the reorganization plan a strong chance of being confirmed in court.

Stablecoins and Payout Concerns

Should the SEC object, this could complicate the payout process and potentially delay creditor reimbursements.

FTX’s legal team, however, has stressed the need for cash payouts to avoid further delays and ensure the process adheres to bankruptcy regulations. They argue that paying creditors promptly is crucial to mitigating financial distress among affected customers.

The Surprise Shareholder Payout

However, FTX’s attorneys have justified this decision as a means to avoid costly and time-consuming litigation over the forfeiture proceeds.

Some creditors have taken to social media to express dissatisfaction with the decision to allocate funds to shareholders. Many creditors feel that their life savings, tied up in the exchange, should be prioritized over shareholder reimbursements.

For some, the revised plan has caused anxiety and mental distress, as their assets remain frozen while shareholders stand to benefit from government forfeitures.