- Consensual resolution prioritizes customer interests.
- Flexibility for customers to choose claim reconciliation jurisdiction.
- CEO John Ray III praises alignment with customer interests.
FTX Debtors and FTX Digital Markets have unveiled a comprehensive global settlement agreement with the Joint Official Liquidators (JOLs) representing FTX Digital Markets. This pivotal announcement follows intricate legal maneuvering surrounding the collapse of the FTX group and aims to provide a mutually beneficial resolution, pending court approvals.
The Global Settlement Agreement, disclosed in a joint press release, incorporates key provisions designed to ensure a consensual resolution. Firstly, the debtors and FTX Digital Markets will amalgamate their assets, facilitating equitable distributions for FTX.com customers in both proceedings. This unified strategy underscores a commitment to prioritizing customer interests and delivering consistent outcomes.
Secondly, the agreement affords customers—excluding insiders and specific excluded parties—the choice between reconciling and receiving payments in the Chapter 11 cases of the debtors or the liquidation proceeding for FTX Digital Markets. To mitigate potential discrepancies, the parties have agreed to harmonize their approaches to valuing FTX.com customer claims, with the valuation process subject to approval by both the US Bankruptcy Court for the District of Delaware and the Supreme Court of the Bahamas.
FTX Digital Markets extends flexibility to eligible customers, allowing them to elect the jurisdiction for claim reconciliation and payment. This election can be made during the second quarter of 2024, either through Chapter 11 plan ballots distributed by the debtors or a separate proof of debt form filed in FTX Digital Markets’ liquidation proceeding. Customers who do not make a choice will have their claims reconciled and paid in the Chapter 11 cases.
The Global Settlement Agreement also encompasses critical agreements on asset monetization and inter-estate funding between the debtors and FTX Digital Markets. Pending court approval, FTX Digital Markets will take the lead in maximizing the value of real estate and other assets in The Bahamas, as well as pursuing specific litigation and avoidance actions. The debtors will spearhead operational leadership for all other recovery activities.
John J. Ray III, Chief Executive Officer, and Chief Restructuring Officer, expressed his satisfaction with the settlement, highlighting its alignment with customer interests and acknowledging the vital role played by the Joint Official Liquidators and The Bahamas in the recovery efforts.
The financial markets responded positively to the news, with FTT experiencing a noteworthy surge of 13% within the past few hours. This surge is attributed to the favorable resolution achieved between the parties involved in the Chapter 11 cases, resulting in the current trading price standing at $3.7700.
Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.