As a researcher who has witnessed the tumultuous rise and fall of numerous companies, I must admit that FTX’s reorganization plan approval is a remarkable turn of events. It serves as a testament to the resilience of the financial industry and the determination of its regulators. The estimated recovery, ranging from $14.7 billion to $16.5 billion, is nothing short of astounding, especially considering the company’s historic collapse just two years ago.
In a major development, FTX’s bankruptcy process has been given the green light by the United States Bankruptcy Court for the District of Delaware, as they have endorsed FTX’s strategy for restructuring.
This comes nearly two years after the crypto exchange’s historic collapse in November 2022.
FTX Bankruptcy Reorganization Plan Approved
The agreed-upon strategy, that had been endorsed strongly by the lenders, is expected to provide an average return of 119% on claims value, with certain creditors even receiving as much as 140% in cash. Roughly 98% of FTX’s creditors, ranked by the amount owed, are anticipated to receive their reimbursements within 60 days following the plan’s activation date.
The official announcement states that FTX anticipates recovering a total of around $14.7 billion to $16.5 billion. This estimate is based on assets they’ve retrieved from various organizations, such as the U.S. Department of Justice and foreign regulatory bodies.
Speaking about the recent update, FTX’s CEO and Chief Restructuring Officer, John J. Ray III, expressed his thoughts.
Today’s success is a testament to the expertise and unrelenting efforts of the team of experts who painstakingly reconstructed FTX’s financial records and, leveraging their global reach, gathered assets from various parts of the world. This accomplishment also underscores the effective partnerships we have forged with international governments and agencies, all working towards our common goal of preventing the misdeeds of FTX insiders.
The new CEO, Ray III, stated that the company aims to repay 100% of the claims made by non-government creditors during bankruptcy, including interest. This is expected to be part of the largest and most intricate distribution of assets from a bankruptcy estate ever recorded in history.
He mentioned that they’re making efforts to conclude agreements for distributing money to creditors spread across more than 200 international locations.
For smooth delivery, we’ve recruited experts who will guarantee safe and timely return of the recovery services to our global customer base.
Events Post FTX’s 2022 Downfall
In late 2022, FTX declared bankruptcy after its downfall. By November 2023, Sam Bankman-Fried was found guilty on seven counts, which included wire fraud and conspiracy, and was given a prison sentence of approximately 25 years.
In May, the company’s co-CEO, Ryan Salame, was sentenced to 90 months in prison.
Lately, Caroline Ellison, the CEO of Alameda (which is related to FTX), has been given a two-year sentence due to her part in the company’s collapse. Ex-FTX executives Gary Wang and Nishad Singh are yet to receive their sentences. Singh’s sentencing is planned for this month, while Wang’s will happen in late November.
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2024-10-08 11:10