Valuation of Claimants’ Digital Assets
A notable provision in the plan is the valuation of claimants’ digital assets in cash at the time of the bankruptcy filing, which occurred on November 11, 2022. This approach ensures a fair assessment and treatment of the assets involved.
Market Recovery Following FTX Collapse
The collapse of FTX initially caused a significant market downturn. However, the global crypto market cap has since made a healthy recovery, surging from approximately $856 billion to $1.6 trillion at present. This bounce-back demonstrates the resilience and growth potential of the cryptocurrency market.
Concerns Over Plan’s Compliance with FTX’s Terms of Service
Sunil Kavuri, an outspoken FTX creditor, has raised concerns regarding the reorganization plan. Kavuri argues that the plan contradicts FTX’s Terms of Service, which stipulated that digital assets belonged to individual customers rather than the exchange. Kavuri specifically accuses SBF, the convicted CEO, of misusing customers’ digital assets. This adds an element of controversy to the ongoing proceedings.
Voting and Compromises in the Reorganization Plan
Creditors from specific classes will have the opportunity to vote on the amended reorganization plan, demonstrating a fair and democratic decision-making process. The Debtors emphasize the extensive efforts and compromises made to develop a plan that considers the interests of all parties involved. The intention is to achieve the best, most equitable, and economically viable outcome for all creditors and stakeholders in these Chapter 11 Cases.
“Cram-Down” Possibility for Non-Agreeing Creditors
In certain circumstances referred to as a “cram-down,” classes of creditors who do not agree with the plan can still be compelled to accept it. However, this can only occur if the proposed solution is deemed “fair and equitable” according to the Debtors’ statement. This provision ensures that the plan maintains fairness and avoids undue advantage for any party involved.