FTX’s creditors are facing bad news regarding its debt repayment process, with reports suggesting that nearly a year after the company filed for bankruptcy it will only be able to recover between 10% and 25% of the money it lost. FTX has promised to try to recover as much as possible, but due to the costs and fees associated with bankruptcy, as well as international taxes on some claims, the assets available for distribution appear limited. There is still disagreement among creditors about how they will be paid, with some preferring cryptocurrency over cash to avoid additional taxes.
The bankruptcy court has scheduled a hearing for October 2024 to approve the final distribution plan. If approved, junior creditors could begin receiving payments by the end of 2024, while senior creditors could receive their share by mid-2025.
In this complex situation, many clients feel frustrated by the length of the process and the expectation that they will only be able to recover a small portion of their initial investment.
