FTX, a once-celebrated cryptocurrency exchange that eventually went bankrupt, announced in a recent press release that its amended reorganization plan has received “strong” preliminary support from its creditors.
In the release, the company and its affiliated debtors stated that the reorganization plan, which was filed with the United States Bankruptcy Court for the District Court of Delaware, has garnered majority backing from all categories of creditors eligible to vote.
This includes customer classes from both FTX US and FTX Dotcom, signaling broad-based approval across different segments of the creditor pool.
Do Creditors Still Believe in FTX?
According to unofficial voting reports released by FTX, roughly 95% of creditors who have already cast their votes have favored the reorganization plan.
This level of support is particularly noteworthy as it represents 99% of the voted claims by value, demonstrating overwhelming creditor confidence in the proposed reorganization strategy.
Additionally, FTX reported that more than two-thirds of all solicited claims by voting value participated in the voting process, a critical factor in achieving the necessary “thresholds for acceptance under the US bankruptcy code.”
The release read:
FTX will file the final voting results with the United States Bankruptcy Court for the District Court of Delaware prior to the Confirmation Hearing, which is scheduled to commence on October 7, 2024.
Notably, the confirmation hearing on October 7 will be a pivotal moment in the reorganization process, as it will determine whether the plan can be implemented as proposed.
FTX’s Chief Restructuring Officer and CEO, John Ray III, commented on the voting results, highlighting the significant turnout as a “strong support and consensus for FTX’s Plan of Reorganization.”
Details Of The Reorganization Plan And Future Steps
Giving details of the reorganization. Ray noted that the plan’s innovative structure is designed to “return 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” addressing complex disputes with governmental and private stakeholders.
This approach is intended to maximize recoveries for creditors while resolving legal and financial complexities that have arisen during the bankruptcy proceedings.
Ray further emphasized that FTX will continue collaborating closely with creditors and the court to finalize the reorganization details in the coming weeks.
He expressed gratitude for the turnout from stakeholders, which has been crucial in advancing the reorganization efforts. Ray noted:
We are grateful for the collaboration with our stakeholders and creditors to date, and we will continue to work constructively with our creditors and the Court over the coming weeks leading up to the confirmation hearing. We are pleased to be moving closer to distributing cash to customers and completing the Chapter 11 process.
Following the release of the vote favoring the reorganization plan, FTX’s native token, FTT, saw quite a noticeable spike in the chart. So far, the asset has risen from lows of a mere $1 as of early this month to currently trading at $1.4, at the time of writing—more than a 12% rise in the past day.
Featured image created with DALL-E, Chart from TradingView
