FTX Plans to Set Aside $230M for its Shareholders
In a provision that has just been disclosed, the debtors in charge of the collapsed cryptocurrency exchange FTX will allocate up to $230 million from government forfeiture proceedings for preferred shareholders.
The creditors, who are usually reimbursed before shareholders in bankruptcy proceedings, were taken by surprise when the filing was made public, as they were unaware of the provision and had voted in favor of the plan before the voting deadline on August 16.
Sunil Kavuri, representing the largest FTX creditor group, expressed disappointment as ordinary creditors were not consulted about the decision.
The FTX debtors’ estate, led by lawyers from Sullivan and Cromwell, will contribute 18% of proceeds from government forfeiture actions to a special fund exclusively for specific shareholders, with a cap of $230 million.
Although the agreement was officially executed on August 28, almost two weeks after the voting deadline, it was not revealed until September 27, the final day allowed for the estate to file its amended plan, as stated in the agreement.
