FTX Dockets

FTX filed a motion to authorize a settlement with the IRS reducing $24b in claims to (1) a $200m priority tax claim payable within 60 days of confirmation and (2) $685m junior subordinated claim. The junior subordinated claim is subordinated to customer claims and their consensus interest. This settlement adds significant value to creditors by reducing a very large priority claim, reducing litigation time and expense, and resolving complex disputes. The IRS has asserted significant tax liabilities for "misappropriation income" which, absent a settlement, the IRS indicated it would pursue. Without a settlement the debtor faces significant cost and time in both estimating and litigating the claim. Currently there are 47 tax claims pending against 31 debtors.

FTX filed a notice of proposed sale of the remaining estate Athropic shares to a consortium of purchasers. The notice proposes selling 15,073,349 of shares for an aggregate purchase price of approximately $452.2m. The deadline to object to the sale is June 7, 2024.

FTX filed a revised chapter 11 plan and disclosure statement proposing to pay customer claims 127%-142%. The plan is supported by the Debtor's board of directors, Bahamas joint liquidators, Ad Hoc Committee and the Class Action Claimants. In addition to discussing creditor treatment, it provides information on the Bahamas Opt-In Election and the convenience class election. FTX has scheduled a Disclosure Statement Hearing for June 25, 2024.

Judge Dorsey has entered an order approving the Global Settlement Agreement with the Voyager estate as motioned. $130m of claims asserted by Voyager against the FTX estates are deemed withdrawn and expunged. $5m held in escrow by Voyager will be released to Voyager and the $445m reserve held by Voyager will be released to Voyager. Previously, on April 9, 2024 at docket no. 11548 Debtor’s counsel for FTX filed a motion to authorize entry into a global settlement with Voyager Digital estate.

FTX debtors liquidated $1.89b in crypto in March 2024 under their previous order for the sale or transfer of certain digital assets. This brings the end of month cash balance to $8.4b in March. When the debtor receives payment on the sale of Anthropic preferred shares, the estate will have approximately $9.2b in cash for creditors. The estate also recovered $.62m from the sale of venture assets and dissolution of two corporate entities. The liquid estate assets stand at $8.41b in cash, $1.74b in crypto (valued as of the petition date). We estimate an end of March crypto markup at market prices to be $2.8b, giving an estimated estate asset balance of $12.98b.

On April 8, 2024 at docket no. 10348 Judge John Dorsey entered an order authorizing the sale of FTX Trading, Ltd’s Series B Preferred Shares in Anthropic, PBC. Perella Weinberg led the sale of the assets for a gross price of $884,109,327 to twenty four purchasers. The sovereign wealth fund of Abu Dhabi acted as the cornerstone investor, purchasing 56.6% of the shares available for approximately $500m USD. Other prominent purchasers include Jane Street Global Trading ($100m), Fidelity Management & Research Company ($45m) and the Ford Foundation ($5m). FTX Debtor Clifton Bay Investments LLC originally invested $500m in a modified simple agreement for future equity in October, 2021 which was subsequently converted to 44.5m of Series B Preferred Stock in May, 2022. Perella Weinberg earned a 1.75% fee on the transaction in accordance with their retention letter, netting a $15,471,913.22 transaction fee.

An exmainer is appointed. No later than 60 days from the entry of this order the examiner shall file a report that (1) summarizes the investigations conducted by the Debtors, the committee, and third paries, summarizes the findings/status of the investigations, and make recommendations for additional investigations. For any additional investigations the examiner may propose a scope, duration, cost, and rationale for further investigation. The report must investigation: the appointment of Sullivan and Cromwell as debtors counsel, employees involved in fraud, whether FTT was used to inflate the value of FTX or not. The budget for the examiner is $1.6m, including any professional fees.