Original | Odaily Planet Daily
Author | Nan Zhi
Early this morning, FTX Trading Ltd. (also known as FTX.com) and its affiliated debtors submitted the expected revised reorganization plan and related disclosure statement, which disclosed the distribution plan for global customers and other creditors. Odaily will interpret the key points and historical background of the document in this article.
Key points of the document
Creditor Compensation
The document states that 98% of FTX creditors will receive at least 118% of the recognized debt compensation in cash within 60 days after the plan takes effect. This represents a further increase from the previously estimated compensation rate of 93% - 97% one month ago. This portion of creditors is classified in the document as a special "convenience type," with the condition that creditors holding claims in an allowed amount of $50,000 or less.
Other creditors will receive 100% of the recognized debt compensation and will be compensated for the time value of their investments, with the document stating that this portion is valued in the billions of dollars, with a maximum annual interest rate of 9%.
Government creditors' claims will be classified as subordinate compensation to ensure that non-government creditors receive full interest.
Asset Value
It is reported that FTX expects to aggregate and realize assets with a total value available for distribution of approximately $14.5 billion to $16.3 billion, with a large portion coming from investments or litigation claims held by Alameda or FTX Ventures.
Since FTX filed for Chapter 11 bankruptcy in the Delaware court on November 11, 2022, there has been a significant change in the value of its assets and debts. The initial bid offer was around 6%-10% of the debt value on November 18, 2022, with a trading amount of approximately $1 million.
As of the end of March this year, a total of 49 claims with a total amount exceeding $439 million have been traded on the main trading platform Claims Market. Additionally, according to court records from March 20, hedge funds have purchased heavily discounted claims worth over $2.3 billion, resulting in substantial profits for early buyers.
On April 30, according to sources, the SOL in FTX's bankruptcy assets was sold in a second batch at a price of approximately $100. Approximately 1.8 million SOL were sold in a single auction, valued at approximately $232 million. The bidding was reported to have been completed on April 25, with the bid range for locked SOL being $85 to $110, and bids of $95 and above were claimed to have been accepted. Furthermore, according to Bloomberg, a source familiar with the matter stated that Pantera Capital purchased more locked SOL in the recent auction. Earlier, Sullivan and Cromwell sold SOL worth $1.7 billion at a price of 64 USDT.
Currently, FTX still holds over 40 million locked SOL, and the fluctuation in SOL price continues to have a profound impact on asset value.
IRS Claims
In fact, at the end of April 2023, the Internal Revenue Service (IRS) filed a claim for assets of FTX and its affiliated entities valued at nearly $44 billion, with the compensation priority potentially even surpassing that of other creditors in the bankruptcy case, significantly depressing the value of FTX's debt at one point.
However, according to the latest documents, the IRS's corresponding claim has been converted to a $200 million cash payment and a $685 million subordinate claim, with a priority lower than all creditors and government entities.
Conclusion
While most creditors can receive over 100% compensation for their claims, the calculation is based on the token price at the time of the bankruptcy filing in November 2022, resulting in significant relative losses.
It is worth noting that this plan is not the final version and still requires approval by the bankruptcy court; once approved, most small creditors will receive compensation within 2 months. Odaily Planet Daily will continue to follow relevant developments.
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