FTX and its affiliated debtors are set to implement their Chapter 11 Plan of Reorganization by January 2025. The plan will distribute funds to creditors and customers, with the first round of distributions starting in January 2025 and targeting holders in the Convenience Classes. FTX CEO John J. Ray III expressed his satisfaction with the progress of the distribution plan, highlighting the recovery efforts of the team supporting the Debtors.
US Bankruptcy Judge John Dorsey approved the $16.5 billion recovery plan, which prioritizes FTX customers for repayment. The plan relies on settlements with FTX customers, creditors, US government agencies, and international liquidators. The total value recovered could be as high as $16.5 billion, although it may fall to $14.7 billion after cash conversion. The collapse of FTX in November 2022 due to mismanagement of funds by founder Sam Bankman-Fried and other executives left around 9 million customers and investors facing significant financial losses.
FTX emphasized that customers must establish approved accounts with distribution agents, complete Know Your Customer (KYC) verification, and submit tax forms to qualify for the initial payout. Claims traders were warned that transfers made within 45 days of the distribution record date may not be reflected in the claims register in time, potentially affecting distribution to original claim holders. The final arrangements with specialized distribution agents will be completed in December, allowing customers in supported jurisdictions to establish accounts through FTX’s customer portal.
The timeline for reimbursements will be revealed in December once court approval for the Disputed Claims Reserve Amount is obtained. The distribution of proceeds is expected to begin in early 2025, with the team of professionals supporting the Debtors already having recovered billions of dollars on behalf of FTX’s creditors and customers. The approved plan prioritizes FTX customers for repayment, ahead of competing claims from government regulators.
In conclusion, FTX and its affiliated debtors are making progress towards implementing their Chapter 11 Plan of Reorganization by January 2025. The approved $16.5 billion recovery plan prioritizes repaying FTX customers, with distributions expected to start in January 2025. Customers must meet certain requirements to qualify for the initial payout, and claims traders are advised to be cautious about transfers close to the distribution record date. The collapse of FTX in 2022 due to mismanagement by executives left millions of customers and investors facing financial losses, but efforts are being made to reimburse them through the recovery plan.
