According to Bloomberg, the latest proposal from the FTX restructuring team actually contains many unresolved issues that need to be clarified. For example, it does not clearly indicate whether FTX will be restarted. In addition, according to calculations by KOL, the actual legal fees paid by FTX have reached 1.45 billion dollars…
(Previous summary:
“FTX Restructuring Proposal” is ridiculous! Based on the market compensation during bankruptcy last year, the price of one BTC is only $17,000…)
(Background supplement:
“US Tax Bureau Pursues $24 billion from FTX” — Judge suggests “reducing the amount” and will hold a hearing early next year to make a decision.)
The FTX restructuring team, which has already gone bankrupt, submitted a revised Chapter 11 restructuring plan to the bankruptcy court in Delaware on the 16th. Among them, regarding the compensation for customer assets, FTX debtors proposed to calculate the value based on the cash value at the time of FTX’s bankruptcy application in November 2022, when the price of Bitcoin was only $17,000…
Uncertainty in restarting the exchange
According to Bloomberg, the actual proposal includes many unresolved issues that need to be clarified. The plan does not explicitly indicate whether the currently closed cryptocurrency exchange will be restarted. On the other hand, the valuation method for certain digital tokens has not been specifically stated.
Although the proposal states that the FTX restructuring team plans to allocate billions of dollars to its creditors and customers, the details of how much compensation the creditors can expect have not been determined.
In the future, with this new proposal, some creditors will have the opportunity to vote in 2024. The FTX restructuring team mentioned in a statement that they have put in a lot of effort to achieve this plan. Their goal is to ensure that this plan is fair and reasonable for all creditors and stakeholders affected by this Chapter 11 bankruptcy case, and it is economically the most favorable solution.
For this plan to take effect, it requires the agreement of a certain number and amount of creditors. However, there is a situation called “forced implementation,” where even if some creditors do not agree to this plan, they may still have to accept it as long as the plan is considered fair and reasonable.
Are legal fees higher than the cost of compensating customers?
It is worth mentioning that according to calculations by KOL @MrPurple_DJ, who claims to be proficient in mergers and acquisitions and private equity, he found that the current legal fees for the FTX restructuring team have reached 1.45 billion dollars, while the actual cost of compensating customers is only 1.42 billion dollars. The exorbitant legal fees have attracted many criticisms, and many people believe it is quite unreasonable, questioning whether the funds of all users are being earned by the legal team again (the specific details of the funds have not been disclosed, for reference only).
Related Reports
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Former FTX executives “creating a new exchange”! Led by SBF, a convicted key witness: Hoping to protect user assets this time
FTX is expected to restart news: SOL surges 200% to over $60, FTT soars to $5.5; hopes for full compensation increase
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FTX
MrPurple_DJ
Bloomberg