FTX Creditors File Objection To Bankruptcy Reorganization, Not In Debtors’ “Best Interests”
FTX creditors have filed a June 5 objection to the crypto exchange’s repayment plan on the grounds that the FTX bankruptcy estate’s proposal does not work in favor of their “best interests.”
According to the objection, FTX creditors are concerned about a number of items included in the estate’s plan, including the possibility of a “taxable event” since each respective investor will be receiving money instead of digital assets.
“It is painfully apparent that the debtors’ proposed plan will inflict additional hardships on customers through forced taxation that could be avoided by making an “in kind” distribution,” the filing reads.
CAHC has filed a objection to the FTX Plan
1) Plan is unconfirmable as a matter of law
2) Includes releases not in interest of the estate
3) Ignores property rights issue
4) Does not satisfy the best interest test pic.twitter.com/rpXxz0tmP2
— Sunil (FTX Creditor Champion) (@sunil_trades) June 6, 2024
In addition to tax concerns, creditors widely disagree with the valuation of assets ascribed to their claims under the FTX plan and moreover dispute whether or not customer assets should be distributed by the John J. Ray III-led estate.
“The clear and unambiguous terms of service, as well as public records, including statements by the debtors, the CFTC, the SEC, guilty pleas by former controllers of the debtors and testimony in Samuel Bankman-Fried’s criminal trial support the unequivocal conclusion that the Debtors seek to distribute stolen digital assets,” the objection states.
“(The) debtors position is diametrically opposed to the findings – beyond reasonable doubt – of SBF criminal case that SBF misappropriated customer funds,” Sunil Kuvari, an FTX creditor and activist alleged in a June 6 X post.
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