A group of creditors of the digital currency trading platform “FTX”, led by Sunil Kavori, has filed a formal objection to the reorganization plan proposed by the platform’s bankruptcy estate. Creditors find that the proposed plan does not serve their best interests, and are particularly reluctant to pay cash, which would burden them with unnecessary tax burdens. Instead, creditors suggest repayment through in-kind assets as a fairer solution.
The creditors' objection was not limited to the method of payment, but also extended to the release of any funds to the debtors. The creditors base their position on the provisions of Chapter 11 Law, and consider that the release of funds represents an attempt to redistribute “stolen assets.”
These objections come in the context of a history of disputes that have arisen between creditors and the FTX bankruptcy estate since 2023. The official committee of unsecured creditors has previously expressed its disappointment with the reorganization plan, noting that it was not involved in drafting the process.
Furthermore, the ACC warns that the complexities of the reorganization plan will significantly prolong and increase the cost of the settlement proceedings.
Adding to these complications is a previous claim submitted by former FTX customers and creditors in January 2024. They then demanded that they be compensated using current market prices, instead of relying on the low 2022 prices that coincided with the stock market collapse.
All of these controversies over the reorganization plan emerge as key points in FTX's ongoing bankruptcy proceedings. The dispute still exists between the platform’s estate and the creditors regarding the issue of payment in kind and property rights in general.
