FTX Amends Settlement Offer Following U.S. Trustee’s Concern

A new twist has emerged in the FTX crypto exchange bankruptcy saga. The exchange has chosen to amend its proposed settlement, pivoting in response to apprehensions raised by the U.S. Trustee.

Settlement Proposals

FTX, the beleaguered cryptocurrency exchange, has shifted its stance by presenting an adjusted settlement motion. This revision arises shortly after the U.S. Trustee’s reservations on a prior motion were brought to light. FTX’s decision to redraw its settlement blueprint aims to bridge concerns and ensure smoother proceedings.

The U.S. Trustee had initially flagged discrepancies in the former motion, highlighting that the designated $10 million benchmark was significantly elevated to be labeled as a minor claim. Additionally, the Trustee pointed out a lack of adequate clarity regarding the nature of these claims.

An Olive Branch Extended 

In a bid to streamline the settlement process and address the U.S. Trustee’s reservations, FTX’s debtors have introduced several modifications. They have proposed to acknowledge the U.S. Trustee as a party who would be notified during the process. Furthermore, there is a proposed reduction in the maximum claim value, bringing it down from the earlier set of $10 million to a more modest $7 million.

FTX’s debtors are taking a proactive step. They’ve committed to providing monthly updates on the settlements that have been finalized. It’s worth noting that for a claim to proceed, any concerns flagged by the parties notified must be addressed. If these concerns aren’t resolved amicably, the court’s intervention would be sought to make a final decision.

The Creditors Committees 

Driving the settlement process are two essential creditor committees: The Official Committee of Unsecured Creditors and the ad hoc Committee which represents international clients. Their role is important in safeguarding interests and ensuring that the settlement process is equitable.