The FTX Debtors estate, led by CEO John Ray III and attorneys at Sullivan & Cromwell, today filed its amended Chapter 11 reorganization plan, which lays out precisely how bankruptcy claims will be treated in the case.
Notably, the plan contains a provision that would value claimants' digital assets in cash at the time of the bankruptcy filing date, November 11, 2022.
The FTX collapse caused a notable drop in the market which has since recovered healthily, with the global crypto market capitalization rising from approximately $856 billion to 1.6 trillion today. Even the FTX token itself has nearly doubled in that time. That means creditors could lose millions in potential profits if the plan is approved.
Sunil Kavuri, a declared creditor of FTX, says the reorganization plan goes against FTX's Terms of Service, which stated that titles to digital assets belonged to customers and not the exchange. โThe reason SBF was convicted beyond a reasonable doubt on all 7 counts was that he stole digital assets that were owned by FTX clients,โ Kavuri said.
Creditors belonging to certain classes will have the opportunity to vote on the modified plan of reorganization, the plan clarify. in a statementThe Debtors emphasize the efforts made to reach this point and write: "the Plan and this Disclosure Statement reflect many commitments to create the best, most equitable and economical outcome for all creditors and interested parties in these Chapter 11 Cases."
Various approval thresholds in both dollar amount and number of claimants will be required for the plan to take effect. However, in certain circumstances known as "cram-down," classes of creditors who did not agree to the plan may still be forced to accept it, as long as the solution is "fair and equitable," according to the Debtors' statement. . .
FTX did not immediately respond to a request for comment from The Block.
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