FTX Proposes Bankruptcy Plan to Repay Creditors with Interest, Pending Approval

May 11, 2024, 03:06 PM

FTX has unveiled a comprehensive bankruptcy plan aimed at fully repaying its creditors, with interest, as explained by Thomas Braziel. The plan, detailed in a 90-page document with an additional 163-page explanatory document, addresses various complexities including inter-creditor disputes and the socialization of gains among larger creditors. Some creditors have expressed dissatisfaction, noting that the value of their crypto holdings has significantly increased since the bankruptcy filing, making the proposed repayments insufficient in crypto terms. Additionally, the plan has faced scrutiny over the $1.5 billion earned by lawyers and the sale of some equity and tokens for far less than their current valuations. The plan's approval is pending creditor agreement, with a potential 'cramdown' legal maneuver discussed as a means to enforce the plan if necessary.