US Trustee’s Objections Lead to Amended Settlement Proposal by FTX

In response to U.S. Trustee’s objections, FTX’s debtors revise their settlement proposal, lowering the maximum claim value in the ongoing bankruptcy case.

FTX’s debtors amended their settlement proposal in response to objections from the U.S. Trustee, as per a new court document filed Sunday. The revised proposal includes several key changes aimed at addressing the concerns raised.

The U.S. Trustee had initially flagged discrepancies in the former motion, highlighting that the designated $10 million benchmark was significantly elevated to be labeled as a minor claim. Additionally, the Trustee pointed out a lack of adequate clarity regarding the nature of these claims.

In the revised proposal, the maximum claim value has been reduced from $10 million to $7 million. This adjustment aligns with the U.S. Trustee’s earlier objection, which argued that the original threshold was overly generous.

The debtors have also committed to submitting monthly reports detailing the settlements that have been executed, promoting transparency in the process. The U.S. Trustee will be acknowledged as a party who would be notified during the process, ensuring that any objections raised must be addressed before the claim process can proceed.

Two key creditor committees are involved in the settlement process: The Official Committee of Unsecured Creditors, a formal body representing the interests of creditors in bankruptcy proceedings, and the ad hoc committee comprised of international customers, who also hold a stake in the resolution of the FTX bankruptcy.

The revised proposal is a response to the U.S. Trustee’s concerns and represents an adjustment in FTX’s approach to the settlement process.