FTX administrators have expressed their disapproval of crypto traders and market makers of a creditors’ panel for attempting to gain control of assets without considering the impact it could have on other stakeholders. This disagreement has cast a shadow on the negotiations taking place between stakeholders on a restructuring plan that is meant to help return the roughly $8.1 billion FTX owes customers.
The FTX management team, led by CEO John Ray III, submitted a draft reorganization plan on July 31. However, the same day, the official committee of unsecured creditors accused the plan of disregarding their suggestions without a single call or meeting to discuss the terms of plan.
In response, FTX administrators filed a statement on Wednesday, saying that the plan was criticized mere moments after it was submitted, while the debtors had worked with the committee’s professionals over the course of many months to develop the draft plan and terms. Citing 112 documents, dozens of calls, meetings, and 779 hours in invoices of the committee’s legal advisors, the FTX administrators said to suggest otherwise is misleading in the extreme.
The filing also noted that the committee’s complaint that the Debtors had not invested in treasury securities would require relief from this Court, and that they were heavy with the weight of an unstated agenda specific to the individual members of the Committee. FTX lawyers also argued that the members of the creditors’ Committee are experienced in certain aspects of the crypto space but not in restructuring.
The Committee may be a statutory fiduciary for all unsecured creditors, but it is not representative of all of the various classifications of creditors, nor does the Committee reflect the views of all of the 1.9 million customers of the FTX.com exchange, the filing said.