December Reorganization Plans Prepared by FTX Ad Hoc Committee for Amendment

December Reorganization Plans Prepared by FTX Ad Hoc Committee for Amendment


FTX 2.0 Customer Ad Hoc Committee Receives Response from Official Committee

The FTX 2.0 customer ad hoc committee, responsible for the now-defunct crypto exchange, has received a response to its letter from the Official Committee of Unsecured Creditors (UCC).

In a letter dated December 4, 2023, the UCC acknowledged the concerns raised by the ad hoc committee and assured that it is actively working to expedite the bankruptcy process.

The UCC mentioned considering the option of “recovering rights tokens” to maximize returns for unsecured creditors, but specific details remain confidential due to legal obligations.

While both committees are working to assist defrauded investors, they have divergent views on asset valuation and redistribution in the reorganization plan.

The committee aims to submit an amended reorganization plan to the Bankruptcy Court in mid-December, providing further recommendations and exploring alternative options.

The potential acquisition by a third party is still ongoing and subject to court approval.

FTX Global Asset Review Reveals Solvent Affiliates

In November 2022, FTX announced a global strategic asset review led by Perella Weinberg Partners (PWP) in preparation for sale or reorganization.

Interim CEO John J. Ray III emphasized the preservation of franchise value and requested patience from employees, vendors, customers, regulators, and government stakeholders during the Chapter 11 cases.

The global asset review showed that many of FTX’s affiliates have solvent balance sheets, indicating their ability to continue operating.

Regulators Open to FTX Reboot

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US Securities and Exchange Commission (SEC) head Gary Gensler expressed openness to a potential FTX reboot as long as it complies with legal regulations.

Gensler’s statement reflects a potential shift in sentiment towards the crypto industry among US government agencies.

Hot Take: FTX Ad Hoc Committee Progresses Amidst Bankruptcy

The FTX 2.0 customer ad hoc committee has received a response from the Official Committee of Unsecured Creditors, indicating progress in the bankruptcy process. The committees have divergent views on asset valuation and redistribution but are working towards an amended reorganization plan to be submitted in mid-December. The potential acquisition by a third party is still under consideration, pending court approval. Meanwhile, FTX’s global asset review has revealed solvent affiliates capable of continuing operations. Regulators, including the SEC, have expressed openness to a potential FTX reboot if it aligns with legal regulations. These developments signify ongoing efforts to address the fallout from FTX’s collapse and provide hope for affected investors.

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