FTX Files Consensus-Based Plan of Reorganization, Set to Pay Creditors 118% of Their Claims

17 months after filing for chapter 11 in the District of Delaware, FTX Trading Ltd. (d.b.a. FTX.com) and its affiliated debtors ("FTX" or the "Debtors") on Tuesday filed their anticipated amended Plan of Reorganization (the "Plan") and accompanying Disclosure Statement (the "Disclosure Statement") with the U.S. Bankruptcy Court for the District Court of Delaware (the "Bankruptcy Court").

Subject to being finalized and approved by the Bankruptcy Court, the Plan contemplates the centralized distribution to customers and other creditors around the world of virtually all of the assets associated with FTX at the time of its collapse in November 2022, regardless of where the assets were located at that time.

FTX forecasts that the total value of property collected, converted to cash and available for distribution will be between $14.5 and $16.3 billion. This amount includes assets under the control of the chapter 11 debtors as well as assets under the control of the Joint Official Liquidators of FTX Digital Markets, Ltd. (Bahamas), the Securities Commission of The Bahamas, the Joint Official Liquidators of FTX Australia, the United States Department of Justice and dozens of private parties that have cooperated in the recovery efforts.

The Plan contemplates payment in full of all non-governmental creditors based on the value of their claims as determined by the Bankruptcy Court. In addition, the Plan contemplates a subordination arrangement with governmental creditors that allows payment of interest to the primary classes of customers and creditors at up to a 9% rate (the "Consensus Rate") from the commencement of the chapter 11 cases through the date of distribution. There also may be the opportunity for certain creditors to receive additional payments through the Supplemental Remission Fund described in Section 1.F of the Disclosure Statement.

For creditors holding claims in an allowed amount of $50,000 or less, the Plan creates a special "convenience class". Because of this classification, if the Plan is approved by the Bankruptcy Court, the Debtors anticipate that 98% of the creditors of FTX by number will receive approximately 118% of the amount of their allowed claims within 60 days after the effective date of the Plan, subject to know-your-client and distribution information requirements.

John J. Ray III, Chief Executive Officer and Chief Restructuring Officer of FTX, said, "We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors. On behalf of FTX's independent Board of Directors, I want to extend our deepest appreciation to the numerous governmental agencies, including the United States Department of Justice, the Commodity Futures Trading Commission, the Internal Revenue Service and the Securities Commission of The Bahamas, for their tireless efforts, cooperation and assistance through this complex recovery process. I also want to thank the Joint Official Liquidators of FTX Digital Markets, the Ad Hoc Committee of Non-U.S. Customers, the Class Action Claimants, BlockFi, the Official Committee of Unsecured Creditors and all of their professionals for their hard work in the development of the Plan and its resulting achievements. Finally, I want to thank all the customers and creditors of FTX for their patience throughout this process."

(Source: PR Newswire)