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Thomas Braziel, managing partner at 117 Partners, dives into the draft FTX bankruptcy plan, which was praised for paying out at more than 100% in dollar terms, but has a number of intricacies that are drawing criticisms from creditors—including a group that is urging creditors to vote not. 

The episode delves into the nuances of the proposed payout, explaining how the estate was able to pay back more than 100% than the dollar value of the claims, why some creditors are being pitted against each other, and why it might get approved even “over the kicking and screaming” of some creditors. 

Braziel gives his insights into the the rapid formation of this plan, the controversial role of Sullivan and Cromwell, and the logistical challenges posed by what may end up being paper check payouts. 


Show highlights:

  • Why the plan that was filed this week is such big news
  • How it was never even possible for creditors to be made whole in crypto asset terms
  • How the majority of depositors actually had stablecoins on the FTX platform
  • Why there are “inter-creditor” disputes
  • What a “cramdown” is and why it’s significant in this case
  • Criticisms of the plan, and why larger investors, especially with crypto holdings, are having their gains socialized
  • Whether the FTX estate made mistakes by selling some of its positions before they 10x’ed
  • Why FTX didn’t reboot its platform 
  • What conflicts of interest might arise from law firm Sullivan and Cromwell
  • The tax implications for creditors who are non-US taxpayers
  • How the claims are going to be distributed
  • Whether the creditors will favor the proposal and the next steps 

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  • Previous coverage on Unchained of the FTX bankruptcy:


Creditors plan:


Criticism of the plan:


  • Thomas’ thread on the taxes for creditors