FTX gets approval to pay critical vendors, can redact creditors’ and customers’ list

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The Bank­rupt­cy Court for the Dis­trict of Delaware has grant­ed FTX approval for all its first-day motions, includ­ing pay­ing crit­i­cal ven­dors up to $8.5 mil­lion, a Nov. 23 court fil­ing shows.

FTX can pay critical vendors

The court fil­ing revealed that the bank­rupt exchange was grant­ed the right to pay its crit­i­cal ven­dors up to $8.5 mil­lion upon autho­riza­tion from its chief exec­u­tive offi­cer John Ray III.

The court also grant­ed the embat­tled exchange rights to pay its for­eign ven­dor claims up to $1 million.

The bank­rupt firm had ini­tial­ly request­ed approval to pay all its crit­i­cal ven­dors up to $9.3 mil­lion in inter­im orders and $17.5 mil­lion upon the final order. How­ev­er, the court grant­ed it the right only to make pay­ments not exceed­ing $8.5 million.

Accord­ing to FTX’s fil­ing, crit­i­cal ven­dors pro­vide essen­tial goods and ser­vices for the exchange’s running.

FTX would con­sid­er sev­er­al fac­tors like whether these ser­vices could be got­ten from alter­na­tive sources, the impact of fail­ing to pay the ven­dors, and the loca­tion and nation­al­i­ty of these vendors.

The embat­tled exchange had writ­ten that:

“With­out author­i­ty to pay Crit­i­cal Ven­dors, the Debtors believe they could face irrepara­ble secu­ri­ty risks, poten­tial data loss or oth­er dis­rup­tions and ulti­mate­ly loss of val­ue to their estates.”

FTX to redact creditors’ list

Besides the pay­ment approval, the court also autho­rized FTX to main­tain a con­sol­i­dat­ed list of cred­i­tors. The firm can also redact con­fi­den­tial infor­ma­tion about its cus­tomers and creditors.

Sev­er­al media reports revealed that FTX owed its cred­i­tors over $3 bil­lion. The firm owes its largest cred­i­tor $226 mil­lion, while its sec­ond-largest unse­cured cred­i­tor is owed $203 million.

How­ev­er, the court added that it could order the firm to release some or all of the redact­ed infor­ma­tion for a good cause.

Mean­while, reg­u­la­tors in the Bahamas have also agreed to con­sol­i­date all bank­rupt­cy pro­ceed­ings in Delaware.

FTX CEO hints the firm assets could be sold

Speak­ing on the devel­op­ment, CEO John J. Ray III said:

“With the Court’s approvals of our First Day motions, we are mov­ing for­ward as expe­di­tious­ly as pos­si­ble in our efforts to max­i­mize val­ue for all FTX stakeholders.”

He added that some buy­ers are already show­ing inter­est in the company’s assets, and there would be an order­ly process to sell or restruc­ture FTX assets.

Tron founder Justin Sun and cryp­to pay­ments com­pa­ny Rip­ple have hint­ed that they could be inter­est­ed in the pur­chase of FTX’s assets.

FTX has appoint­ed Perel­la Wein­berg Part­ners LP to advise on the sale process.

Post­ed In: FTX, Bank­rupt­cy

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