Bankrupt crypto platform FTX said that its amended reorganization plan has received overwhelming preliminary support from creditors eligible to vote.
According to an announcement by FTX and its affiliated debtors, the plan, which was filed with the United States Bankruptcy Court for the District of Delaware, secured majority backing from all classes of creditors, including those in FTX US and FTX.com.
Unofficial voting reports indicate that over 95% of creditors who have submitted their votes favor the plan, representing 99% of the total claims by value. FTX noted that more than two-thirds of all solicited claims by voting value participated in the process, suggesting that the plan is likely to meet the required thresholds for acceptance under U.S. bankruptcy law.
FTX is set to file the final voting results with the bankruptcy court before the confirmation hearing on October 7. John Ray III, FTX’s chief restructuring officer and CEO, pointed out that strong voter participation shows solid support for the reorganization plan. He also mentioned that the plan’s “innovative design” helps repay 100% of the bankruptcy claim amounts plus interest to non-governmental creditors while addressing disputes with various stakeholders.
Despite strong support, the plan has faced pushback from some FTX customers. After FTX filed the amended reorganization plan on August 2, activist Sunil Kavuri, representing FTX customers, raised concerns about how the plan values crypto holdings.
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Kavuri and a group of creditors objected, arguing that being reimbursed in cash could trigger taxable events, adding extra costs for creditors. They also claimed that FTX should return the original coins, asserting that the plan violates creditors’ property rights.
FTX filed for bankruptcy on November 2, 2022, when the global cryptocurrency market capitalization was $840 billion. Since then, the market cap has risen to $2.1 trillion, reflecting a 161% increase in value.
The recent draft recovery plan released by FTX spurred a big jump in the value of claims, with estimates suggesting most creditors could see a recovery rate of 118%.
FTX’s claims are now trading between 101% and 112% on the crypto bankruptcy site Xclaim, as stakeholders react with both surprise and strategic recalculations.
