FTX, the insolvent cryptocurrency exchange, has revised its settlement proposal in response to objections raised by the U.S. Trustee, as detailed in a recent court filing. Despite expressing frustration over the U.S. Trustee’s singular opposition to the motion and its alleged interference in the safeguarded settlement process supervised by two creditor committees, FTX debtors have opted to amend the proposal to address these concerns.
The updated plan entails involving the U.S. Trustee as a notified party and reducing the upper limit for settled claims from $10 million to $7 million. In addition, debtors will now be required to provide monthly settlement reports, and any objections raised by notified parties will necessitate resolution through a court order before the claims procedure advances.
The two involved creditor committees are the Official Committee of Unsecured Creditors and the Ad Hoc Committee of International Customers. The U.S. Trustee had initially contested the original motion, contending that $10 million was an excessive threshold for a “minor” claim and that insufficient notice had been given regarding the nature of the claims.
FTX, previously the world’s third-largest digital asset exchange, declared bankruptcy in November. This recent move to modify the settlement proposal reflects a collaborative effort to appease objections and move forward with a more inclusive and transparent resolution process.
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