- Over 95% of FTX creditors back the reorganization plan, signaling strong recovery support.
- FTX’s reorganization plan aims to distribute $14.5B-$16.3B, returning 100% plus interest to creditors.
- Ex-FTX exec Ryan Salame challenges guilty plea, citing pressure and unfulfilled prosecutor agreements.
FTX has secured crucial backing from its creditors for its proposed reorganization plan, bringing it a step closer to final approval. The plan, outlining how assets will be distributed and claims resolved, has garnered support from over 95% of voting creditors. This overwhelming support is a positive development for FTX as it navigates its Chapter 11 bankruptcy proceedings.
FTX and its affiliated debtors revealed that over 95% of participating creditors voted in favor of the reorganization plan. These votes account for 99% of the claims by value, demonstrating widespread agreement among creditors, including those tied to FTX U.S. and FTX Dotcom.
The reorganization plan estimates the total value of assets to be collected, converted to cash, and distributed to be between $14.5 billion and $16.3 billion. These assets include those held by FTX’s Chapter 11 debtors and entities such as the Joint Official Liquidators of FTX Digital Markets Ltd (Bahamas) and the Securities Commission of The Bahamas.
John J. Ray III, the CEO and Chief Restructuring Officer of FTX, emphasized the significance of the strong creditor support. He pointed out that the plan’s structure guarantees the return of 100% of bankruptcy claim amounts, plus interest, for non-governmental creditors. Ray expressed confidence about the progress made towards distributing cash to customers and concluding the Chapter 11 process.
The reorganization plan also provides for the payment of interest to the primary classes of customers and creditors at a rate of up to 9% from the beginning of the Chapter 11 cases until the date of distribution. However, the confirmation hearing, at which the final vote counts will be announced, is scheduled to begin on October 7, 2024.
In addition, former FTX executive Ryan Salame has filed a motion to overturn his guilty plea for campaign finance and money-transmitting crimes. Salame alleges that prosecutors failed to honor their agreement to cease investigating his domestic partner, prompting his legal challenge.
Salame, who is scheduled to begin the prison sentence on October 13, has publicly expressed his concerns about the ongoing legal actions and the pressure they are putting on him and his loved ones.
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