FTX Releases Update on Proposed Settlement Plan for Preferred Shareholders, Seeking Distribution Plan with Equal Status for Preferred Shareholders and Creditors

BlockBeats news, on October 1, according to an official FTX article, FTX creditors provided an update on the proposed settlement with preferred shareholders. In the Ch. 11 bankruptcy reorganization plan, FTX will return 100% of the assets under its control to creditors. The Department of Justice has obtained control over the distribution of assets confiscated in criminal cases and made it clear that preferred shareholders and creditors are victims under criminal law.

FTX and preferred shareholders have competing claims to the proceeds of confiscation. Although the Department of Justice will decide how to reconcile these conflicting claims, if the Department of Justice is acceptable, the settlement agreement will resolve these issues in a way that FTX believes is fair to both parties and avoid protracted disputes. In this settlement agreement, FTX requires the Department of Justice to agree to a centralized distribution process through the FTX Ch. 11 bankruptcy reorganization plan to speed up distribution to creditors and avoid a lot of unnecessary expenses. For more information on the DOJ forfeiture proceedings and related assets, please refer to the disclosure statement filed on June 27, 2024.

BlockBeats previously reported that FTX will return $11-16 billion to creditors in the fourth quarter of 2024. Although the specific date is unclear, FTX proposed that the distribution will be made within 60 days after the restructuring plan takes effect. Currently, the next hearing on the restructuring plan is scheduled for October 7. If approved, FTX will have 60 days to distribute assets to creditors.