- FTX’s executive board has filed plans to bring the company out of bankruptcy and potentially relaunch the exchange
- The early filing of the plan aims to facilitate creditor feedback and discussions with stakeholders, with a desire to resolve the bankruptcy quickly.
- The plan includes the option for former customers to receive equity in an “offshore exchange company” instead of a cash payout.
FTX’s executive board yesterday filed plans to bring the company out of bankruptcy and potentially relaunch the exchange. A Plan of Reorganization was filed with the court in charge of the exchange’s bankruptcy in which the board seeks creditor approval for its plans. FTX has been in bankruptcy for almost eight months and the filing represents the most concrete step yet towards seeing the exchange get back on its feet. The concept of an FTX 2.0 has been moted for some months, although many in the crypto space have expressed a lack of enthusiasm over the idea.
Ray Seeks Input From Stakeholders
According to John J. Ray III, Chief Executive Officer and Chief Restructuring Officer of the FTX, the early filing of the plan represents a desire to get things wrapped up quickly. The filing is intended to facilitate creditor feedback and discussions with stakeholders, including the unsecured creditors’ committee, the ad hoc committee of non-U.S. customers, and other involved parties.
The plan outlines a proposed global settlement and good-faith compromise to address a broad range of claims, causes of actions, and disputes involving the FTX Debtors, including intercompany claims. Ray wants to put together a consensual plan that allows FTX to emerge from bankruptcy successfully, working through the open issues contained within it during the third quarter of 2023 and intending to submit an amended plan and a disclosure statement in the fourth quarter.
Debtors Can Choose Exchange Equity
FTX’s former customers can opt to pool their assets to create what the company calls an “offshore exchange company” or a “rebooted” platform not available in the U.S:
Rather than all cash, the Debtors may determine that the Offshore Exchange Company remit non-cash consideration to the Dotcom Customer Pool in the form of equity securities, tokens or other interests in the Offshore Exchange Company, or rights to invest in such equity securities, tokens or other interests.
This addition suggests that debtors could forgo a cash payout for a stake in the new exchange.
In the filing, Ray expressed gratitude to the entire FTX Debtors team for reaching the milestone in the bankruptcy process and for their efforts to maximize recoveries for customers and creditors, which were calculated at some $11 billion when the exchange fell into bankruptcy in November.
