The FTX restructuring team announced on Thursday that it is in the final stages of preparing for the court-approved Chapter 11 reorganization plan to take effect, with the bankruptcy reorganization plan expected to take effect in early January 2025 and begin repaying creditors within 60 days thereafter.
According to the press release, FTX expects to announce the exact effective date of the bankruptcy reorganization plan by the end of December, pending the court's approval of the "disputed claims reserve" order. According to the confirmation order, the first distribution will be made within 60 days of the effective date, paying the holders of the "Convenience Classes" of the allowed claims under the plan.
According to the latest information on FTX's expected distribution timeline, the restructuring team expects to finalize arrangements with dedicated distribution agents in early December, who will assist FTX in distributing recovered funds to customers in the supported legal jurisdictions globally, and FTX will provide guidance on its existing customer portal to help customers create approved accounts with the distribution agents.
FTX customers should note that to be eligible to receive funds in the initial distribution, customers must create an approved account with the distribution agent, complete KYC, and submit the required tax forms before the distribution record date (the date used to determine eligibility for the distribution). (The distribution record date for the initial distribution will be the same as the effective date of the reorganization plan.)
For debt traders, FTX stated that under Section 7.4.1 of the reorganization plan, claims traded within 45 days prior to the distribution record date may not be reflected in the claims register by the close of business on the distribution record date, and these claims may be distributed to the transferee.
The U.S. Bankruptcy Court judge approved FTX's reorganization plan in October this year, with an estimated 98% of creditors expected to receive approximately 119% of their allowed claim amounts within 60 days of the plan's effective date, although the repayment amount is based on the asset value of FTX at the time of its collapse in November 2022, not the current market price.
