FTX Submits Restructuring Proposal to Exit Bankruptcy and Settle Debts with Creditors

The resolution of FTX's bankruptcy saga is underway with the submission of a new proposal, detailing a plan that hinges on valuing creditor claims based on asset prices from the day the exchange declared bankruptcy in November 2022. The proposal, recently filed by FTX's estate in a Delaware court, aims to conclude the bankruptcy proceedings that followed the collapse of the crypto enterprise.

The downfall of FTX, founded by Sam Bankman-Fried, unfolded in November 2022, catalyzed by Bitsday's revelation of the precarious financial state of the firm's trading unit, Alameda. This latest development comes after earlier indications and informal proposals, with a notable intention to return up to 90% of recovered funds to creditors, as anticipated by December 16.

The revised proposal introduces a systematic categorization of creditor and customer claims, prioritized by the estate's plan. The crucial aspect of this plan is the determination of claim values based on asset prices recorded on the day of FTX's bankruptcy filing. Emphasizing the objective to "maximize and efficiently distribute value to all creditors," the estate clarified its intentions in a separate statement.

However, akin to other high-profile cryptocurrency bankruptcy cases, the proposal is likely to face opposition from diverse creditor groups until it secures court approval. A hearing date for the plan is on the horizon, scheduled for 2024. This marks a significant step in the ongoing effort to navigate the complex landscape of crypto-related bankruptcies and ensure a fair and equitable distribution of assets among creditors.

Read More: Crypto Chronicles: FTX's Financial Odyssey