According to the official press release, FTX Trading (also known as FTX.com) and its affiliate debtors (collectively referred to as FTX Debtors) have reached a global settlement agreement with the joint liquidators representing FTX Digital Markets, Brian C. Simms KC, Peter Greaves, and Kevin Cambridge. Both parties will coordinate the integration of assets, negotiate reserve funds, and determine the timing and amounts of distributions. This means creditors can expect a more unified and efficient asset distribution process, whether in the U.S. bankruptcy proceedings or the Bahamas liquidation proceedings.
FTX Digital Markets is a wholly-owned subsidiary of FTX Debtors, currently undergoing liquidation proceedings in the Bahamas. The settlement agreement between the two parties was signed today, but still requires approval from the Delaware Bankruptcy Court and the Supreme Court of the Bahamas.
Under the settlement agreement, to ensure FTX.com customers receive a substantially similar distribution in both proceedings, FTX Debtors and FTX Digital Markets will jointly coordinate the integration of assets and the timing and amounts of distributions. Additionally, all customers of FTX.com (excluding insiders and certain specific excluded customers) will have the option to choose whether their claims will be processed in the FTX Debtors’ Chapter 11 bankruptcy case or the Bahamas FTX Digital Markets liquidation proceedings. Furthermore, the parties will seek to harmonize their assessment of the value of claims for FTX.com customers to minimize potential discrepancies between the two proceedings.
It is worth noting that several previously declared restructuring plans have been reaffirmed in this settlement agreement. These include:
– Cash or digital asset claims (excluding NFTs) for all FTX.com customers will be valued in U.S. dollars based on the application date.
– The FTT of FTX and FTX Digital Markets creditors will be treated as equity and will not receive any compensation.
– FTX.com customers will have the opportunity to choose their preferred jurisdiction for resolving and paying claims through voting or other procedures as early as the second quarter of 2024.