FTX Reviews Bankruptcy Court Petition to Speed Up Settlement of Crypto Claims
Date: 2023-08-21 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
FTX Trading Ltd. filed a revised petition for bankruptcy court approval of simplified procedures for settling small claims against a bankrupt cryptocurrency exchange.
In a filing with the United States Bankruptcy Court in Delaware, FTX asked Judge John Dorsey to allow companies to settle up to $7 million in claims without requiring his approval for each settlement. FTX said the procedures are necessary to effectively resolve "many" potential probate claims.
FTX's initial petition sought settlements of up to $10 million in claims, but was met with objection from the US trustee, who argued that the amount was too high and beyond the control of the creditors.
In the revised petition, FTX lowered the claim ceiling to $7 million to address these issues. The company also agreed to notify any proposed settlement to the unsecured creditors' committee and the US trustee. In addition, FTX has stated that it will file monthly statements of any payments made.
FTX said streamlined resolution procedures are standard in complex bankruptcy cases to avoid legal fees and lengthy court delays in resolving individual claims. FTX has identified thousands of potential claims related to property purchases, investments, donations and more that may need to be resolved.
The unsecured creditor committees and the special creditor committees supported the revised settlement procedures, while the US trustee was the only objector.
FTX argued that the new procedures provide adequate safeguards for creditors through oversight while allowing claims to be resolved effectively. The company asked Judge Dorsey to approve an order allowing dispute settlements of up to $7 million without individual court approval.
The fate of the motion for settlement procedures is up to Judge Dorsey, who will decide whether to grant FTX's request after a court hearing.
