The FTX bankruptcy estate announced a major milestone in their efforts to reimburse creditors of FTX.com and FTX.US as early as the second quarter of 2024.
In an Oct 16 court filing with the United States Bankruptcy Court for the District of Delaware, the FTX Debtors proposed a settlement plan that would pay out a “shortfall claim” of $8.9 billion to customers of FTX.com and $166 million to customers of FTX.US.
(1/4) The FTX Debtors have announced another major milestone in their chapter 11 cases.
— FTX (@FTX_Official) October 17, 2023
The FTX Debtors estimate that both priority and non-priority claimants would receive more than 90% of the distributable value by the end of Q2 next year, if the proposed plan is approved by the Bankruptcy Court.
However, under the terms of the plan, the bankruptcy estate noted that customers of both exchanges will not be paid in full, with greater percentage losses expected by customers of FTX.com.
The amended plan would divide FTX’s assets into three pools — assets segregated for FTX.com customers, FTX.US customers and a general pool of other assets. Those who withdrew over $250,000 worth of assets from the exchange within the nine days leading up to FTX’s declaration of bankruptcy would have their claim value reduced by 15%.
“The proposed settlement of the customer property issues is another major milestone in our case,” said John. J. Ray III, CEO and Chief Restructuring Officer of the FTX Debtors.
“Together, starting in the most challenging financial disaster I have seen, the debtors and their creditors have created enormous value from a situation that easily could have been a near-total loss for customers.”
Although the FTX debtors have filed a notice of the proposed plan with the bankruptcy court, they will need to submit an official filing by Dec. 16 seeking its approval.