- FTX plans to pay back 98% of creditors up to 118% of their allowed claims, subject to court approval
- The remaining creditors will receive 100% of their claims plus billions in compensation for the time value of their investments
- The total value of property collected and converted into cash to be distributed to creditors is estimated between $14.5 billion and $16.3 billion
FTX aims to repay 98% of creditors up to 118% of their allowed claims, while the remaining 2% would be fully repaid plus receive billions in additional compensation. This is a major reversal from FTX’s previous bankruptcy plan.
FTX’s New Repayment Plan
Under the new proposed plan, creditors with allowed claims below $50,000 would receive up to 118% of those claims. The proposed repayment would occur within 60 days of the plan’s approval.
FTX estimated the total value distributed to creditors will range between $14.5 billion and $16.3 billion. Since filing for bankruptcy in November 2022, FTX has clawed back funds from partners and sold shares in companies it had invested in.
Reactions to the Plan
FTX CEO John J. Ray III said the company is pleased to propose full reimbursement with interest for non-governmental creditors. This is a stark contrast to the previous plan, which only returned the value of assets at the time of the bankruptcy filing.
The crypto markets have seen a resurgence since then, with Bitcoin rising over 20%. If approved, the plan would mark a major step in reimbursing creditors after FTX’s collapse.
The Path Forward
The reimbursement plan is subject to finalization and approval by the Delaware Bankruptcy Court. FTX confirmed it will not reboot the cryptocurrency exchange that was once among the largest globally. For now, the company’s focus remains on repaying creditors and emerging from bankruptcy.
