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#ACE FTX Debtors' Chapter 11 Plan Sparks Concerns Over Potential Losses for Creditors
FTX Debtors have unveiled an amended Chapter 11 reorganization plan, marking a crucial step in the defunct crypto exchange's turbulent journey. However, the proposal is likely to trigger significant losses for creditors, potentially amounting to millions of dollars. Here's a breakdown of the critical elements shaping the latest developments in the FTX bankruptcy saga.
Valuation Plan Stirs Controversy
The core of the issue lies in the plan's proposition to value creditors' claims based on crypto prices as of November 11, 2022—the day FTX initiated its bankruptcy petition. This valuation method, while not uncommon, opens the door to substantial losses for creditors, given the considerable drop in cryptocurrency prices leading up to the bankruptcy filing.
Strategic Approach to Value Distribution
The estate, in a separate statement, emphasizes that the reorganization plan is meticulously crafted to "maximize and efficiently distribute value to all creditors."
However, as witnessed in other high-profile crypto bankruptcy cases, the proposal is likely to encounter opposition from diverse creditor groups until it secures court approval. A scheduled hearing in 2024 will determine the fate of this crucial aspect of FTX's restructuring.
Soaring Legal Fees Add to Complexity
Complicating the financial landscape further, FTX has been incurring substantial legal fees, a staggering $53,000 every hour in the three months ending October 31.
The latest round of compensation filings reveals that bankruptcy lawyers charged at least $118.1 million between August 1 and October 31, averaging $1.3 million per day or $53,300 per hour over the 92-day period. #BONK #SATS #INJ #BTC $ETH $SOL $BNB
FTX Debtors have unveiled an amended Chapter 11 reorganization plan, marking a crucial step in the defunct crypto exchange's turbulent journey. However, the proposal is likely to trigger significant losses for creditors, potentially amounting to millions of dollars. Here's a breakdown of the critical elements shaping the latest developments in the FTX bankruptcy saga.
Valuation Plan Stirs Controversy
The core of the issue lies in the plan's proposition to value creditors' claims based on crypto prices as of November 11, 2022—the day FTX initiated its bankruptcy petition. This valuation method, while not uncommon, opens the door to substantial losses for creditors, given the considerable drop in cryptocurrency prices leading up to the bankruptcy filing.
Strategic Approach to Value Distribution
The estate, in a separate statement, emphasizes that the reorganization plan is meticulously crafted to "maximize and efficiently distribute value to all creditors."
However, as witnessed in other high-profile crypto bankruptcy cases, the proposal is likely to encounter opposition from diverse creditor groups until it secures court approval. A scheduled hearing in 2024 will determine the fate of this crucial aspect of FTX's restructuring.
Soaring Legal Fees Add to Complexity
Complicating the financial landscape further, FTX has been incurring substantial legal fees, a staggering $53,000 every hour in the three months ending October 31.
The latest round of compensation filings reveals that bankruptcy lawyers charged at least $118.1 million between August 1 and October 31, averaging $1.3 million per day or $53,300 per hour over the 92-day period. #BONK #SATS #INJ #BTC $ETH $SOL $BNB
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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