FTX bankruptcy inspectors recently unveiled a joint reorganization plan that could bring good news for creditors. FTX said it has raised a substantial amount of cash and is prepared to distribute it to creditors whose total debt is about $11 billion. About 98% of non-government creditors could receive at least 118% of their claims within two months of the plan’s approval.
Some creditors, including those with cryptocurrency loan claims, may even receive up to 142% of their claims, while others can expect full payment with interest. However, the reorganization plan still has to be approved by the bankruptcy court, which could take some time.
In addition, the cryptocurrency prices at which creditors’ claims will be paid will be determined based on November 2022 data, not considering recent market price changes. FTX’s CEO expressed optimism about the plan, noting the possibility of paying off creditors.
While the reorganization plan brings the hope of resolving disputes without costly litigation, its approval could take time, and it could be one of the last steps in the FTX saga, especially given the former CEO’s conviction on fraud charges.
