FTX Plans to Repay Creditors with 118% Recovery Amid Crypto Market Resurgence
Summary:
FTX, a bankrupt crypto exchange, plans to repay 98% of its claimants at least 118% of their approved claims, with remaining creditors receiving full repayment, plus billions for their investment's time value. The proposal awaits approval from the Delaware Bankruptcy Court. Unlike FTX's initial plan, which aimed to refund creditors based on their assets' value during its November 2022 bankruptcy, the new proposal comes amidst a crypto resurgence, with Bitcoin soaring nearly 200%. FTX estimates $14.5 to $16.3 billion as the total value of liquidated assets for distribution to creditors. Creditors with approved claims under $50,000 may qualify for 118% recovery. The proposed repayment could begin within 60 days following the effective date of the plan.
FTX, the cryptocurrency exchange currently in bankruptcy, aims to repay 98% of its backers a minimum of 118% on the value of their approved claims, with the remaining investors receiving full repayment plus a multi-billion-dollar worth time value addition to their investments. On May 7, the indebted crypto trading platform announced its proposal, which is pending ratification and final approval by the Delaware Bankruptcy Court. FTX's CEO and primary restructuring officer, John J. Ray III, expressed satisfaction in putting forth a Chapter 11 proposal that offers the complete return of bankruptcy claim amounts coupled with interest for non-governmental claimants. This represents a stark shift from FTX's earlier plan, which promised to refund creditors based on their assets' value at the point of FTX's bankruptcy back in November 2022. The cryptocurrency market has rebounded in the interim, with Bitcoin (BTC) having soared nearly 200%. FTX projects that the total worth of assets gathered, which have been liquidated for creditors' distribution, is between $14.5 and $16.3 billion. Only those creditors whose claims are approved with a value of under $50,000 will have the opportunity to earn 118% recovery, subject to the bankruptcy court's approval. The proposed repayment is expected to roll out within 60 days post the plan's effective date. This report will be updated as more information surfaces.
Published At
5/8/2024 2:31:38 AM
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