FTX’s long-awaited reorganization plan has garnered overwhelming approval from its creditors, with over 94% voting in favor of the proposal, according to a filing on Monday. This marks a significant step forward in the exchange's efforts to restructure and recover value for those affected by its collapse.
Strong Creditor Support
Kroll Restructuring Administration, tasked with handling the solicitation process, revealed that 94.48% of creditors in the “dotcom customer entitlement claims” class approved the reorganization plan. This class alone represents $6.83 billion in claims. Additionally, 89.1% of creditors in the “U.S. customer entitlement claims” class, representing $60.99 million, voted in favor, while 95.88% of creditors in the “dotcom convenience claims” class, representing $223.59 million, also supported the plan.
The reorganization plan offers a recovery mechanism that could see 98% of creditors receive at least 118% of their claim value in cash. However, this figure is based on the value of cryptocurrencies at the time of the claims' evaluation, which could affect the final outcome for creditors.
Path Forward and Key Dates
The approval process for the plan has been ongoing since August, with the restructuring team expressing satisfaction over the “overwhelming preliminary support” from various classes of creditors. Voting ended in August, and the final confirmation hearing is scheduled for October 7, 2024. This hearing will determine whether the plan moves forward and begins implementation.
The reorganization plan is a crucial part of FTX’s bankruptcy proceedings, following the exchange's collapse, which left thousands of creditors with significant losses. If confirmed, the plan could pave the way for the recovery and return of funds to creditors, signaling a major milestone in one of the most high-profile cryptocurrency bankruptcies to date.
Source: The Block
