A bankruptcy judge has approved FTX’s reorganization plan, which will give creditors 119% of the amount allowed on their claim.
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Conway Gittens: Investors are hoping to put together a stock market win Tuesday after stocks dropped one percent the day before. Earnings season kicks off with quarterly results from Pepsi. The drinks and snacks conglomerate beat profit estimates. Sales, however, were disappointing for the second quarter in a row. Pepsi says price conscious consumers are continuing to watch their budgets.
In other news…FTX creditors are not only getting back what they were owed – they’re getting it back with interest. Nearly two years after the revelation of massive fraud by founder Sam Bankman-Fried brought down the crypto exchange, a bankruptcy judge approved the more than $14 billion payout.
John Ray, who is steering FTX through the bankruptcy process, said in a statement, “Looking ahead, we are poised to return 100% of bankruptcy claim amounts plus interest for non-governmental creditors through what will be the largest and most complex bankruptcy estate distribution in history.”
Fortunately for customers and creditors, FTX had a lot of assets to sell during the bankruptcy process. The company collected between $14.7 billion and $16.5 billion worth of assets, which more than covered the $11.2 billion owed to creditors.
One thing working in FTX’s favor: bitcoin. The hoard of bitcoin it held surged 260 percent in value since the scandal broke in 2022. FTX was able to sell that at a profit. The other payday came from its stake in artificial intelligence. FTX sold-off its investment in Anthropic, an AI start-up for nearly $900 million.
Bankman-Fried, the architect behind the fraud scheme, is currently serving a 25 year prison sentence.
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