Original | Odaily Planet Daily
Author | Nanzhi
Early this morning, FTX Trading Ltd. ( also known as FTX.com ) and its affiliated debtors filed a prospective revised reorganization plan and related disclosure statement, which disclosed a distribution plan to global customers and other creditors. Odaily will interpret the key points and historical evolution of the document in this article.
Interpretation of the key points of the document
Creditor compensation
The document states that 98% of FTX creditors will receive at least 118% of their recognized claims in cash within 60 days of the plan taking effect. This is a further increase from the estimated payout rate of 93% - 97% one month ago. This part of the creditors is classified as a special convenience type in the document, with the condition that the claim amount is less than $50,000 (For creditors holding claims in an allowed amount of $ 50,000 or less) .
Other creditors will receive 100% of their recognized claims and compensation for the time value of their investments, which the document says is worth billions of dollars (Billions in Compensation for the Time Value of Their Investments) , with an annual interest rate of up to 9%.
Claims by government creditors will be reclassified as subordinated compensation to ensure that non-government creditors receive their full amounts with interest.
Asset Value
It is reported that FTX expects the total value of assets collected and cashed out for distribution to be approximately US$14.5 billion to US$16.3 billion , a large part of which comes from investments or litigation claims held by Alameda or FTX Ventures.
Since FTX filed for Chapter 11 bankruptcy in the Delaware District Court on November 11, 2022, the value of its assets and claims has changed dramatically. The first bid was around November 18, 2022, when the claim value was only 6%-10% of the debt, and the transaction amount was about $1 million.
As of the end of March this year, 49 claims with a total value of more than $439 million had been traded on the main trading platform Claims Market. At the same time, according to court records on March 20, hedge funds have purchased more than $2.3 billion worth of heavily discounted claims, and early buyers have made a lot of money.
On April 30, sources disclosed that the second batch of SOL in FTXs bankrupt assets had been sold at a price of about $100. About 1.8 million SOL were sold in an auction transaction, worth about $232 million. Sources said that the bidding was completed on April 25, with bids for locked SOL ranging from $85 to $110, and claimed that bids of $95 and above had passed. In addition, according to Bloomberg, citing a person familiar with the matter, Pantera Capital purchased more locked SOL in the recent auction. Earlier, Sullivan and Cromwell sold SOL originally worth $1.7 billion for 64 USDT.
Currently, FTX still holds more than 40 million SOL in locked positions, and the price changes of SOL still have a profound impact on the value of assets.
IRS Claims
In fact, at the end of April 2023, the U.S. Internal Revenue Service (IRS) filed a claim worth nearly $44 billion against the assets of FTX and its affiliated entities. At that time, the priority of compensation may even take precedence over other creditors in the bankruptcy case, which once greatly suppressed the value of FTXs claims.
According to the latest documents, the IRSs corresponding claim has been converted into a cash payment of US$200 million and a secondary claim of US$685 million, and is ranked lower than all creditors and government entities.
in conclusion
Although most creditors can receive compensation of more than 100% of the value of their claims, the basis for calculating the claims is the token price when the bankruptcy was filed in November 2022, and the relative loss is still large.
It is worth noting that this plan is not the final version and still needs to be approved by the Bankruptcy Court (Subject to being finalized and approved by the Bankruptcy Court); once approved, most small creditors will receive compensation within 2 months. Odaily Planet Daily will also continue to pay attention to related developments.
