- FTX’s debtors have responded to the U.S. Trustee’s concerns.
- New amendments to the settlement procedures have been proposed.
- The parties are yet to reach an agreement as the matter is pending in court.
Fallen crypto exchange FTX and its affiliated debtors have proposed newly revised settlement procedures following the objection of an earlier motion by the U.S. Trustee. In a court document filed on August 20, the debtors submitted that the revised plan would facilitate quick, efficient, and cost-effective resolution of multiple small estate claims.
The U.S Trustee Objection
On August 16, the U.S Trustee in FTX’s bankruptcy case, Andrew R. Vara, filed an objection to the initial proposal by the debtors, arguing that the parties had not provided any information regarding the nature and amounts of the small estate claims they intended to settle.
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The Trustee further asserted that the debtors failed to provide adequate notice regarding the exact type of claims subject to the settlement procedures. “The definition of Small Estate Claims that is set forth in the Motion is so vague that it could cover nearly any claim the Debtors wish it to cover,” read the submission.
The Trustee deemed $10 million “far too high” to suffice a small claim.
The Revised Settlement Proposal
In response to the Trustee’s objection, the debtors have proposed a range of amendments to the original motion, including nominating the Trustee as a third noticed party and filing monthly reports of settled claims. Throughout the case, the Trustee and other parties to request notice will be furnished with written reports within ten days of each calendar month.
The debtors also proposed to lower the maximum value for claims covered by the settlement procedures to $7 million and seek the court’s approval for settlements greater than this value.
Read how FTX plans to establish an offshore company for equity security and tokens:
FTX Plans to Reopen its Doors but Steers Clear of U.S.
Stay updated on the class action lawsuit filed against FTX legal advisors:
Former FTX Legal Advisors Face Fraud Conspiracy Allegations
