As part of the recent bankruptcy filing, former crypto exchange FTX, along with 101 of 130 affiliates, announced the launch of a strategic review of their global assets. The review is an attempt to maximize recoverable value for stakeholders.
FTX, at the time run by CEO Sam Bankman-Fried (SBF), filed for Chapter 11 bankruptcy on Nov. 11 after it was caught embezzling user funds. The bankruptcy filing was intended to cushion the losses of stakeholders related to FTX and affiliates, aka FTX debtors.
1/ Sharing a press release published at the start of the day –
FTX launches a strategic review of its global assets. Text below (and link). https://t.co/wxz9MYnXrn
— FTX (@FTX_Official) November 19, 2022
FTX debtors are in talks with financial services firm Perella Weinberg Partners over various attempted sales or reorganizations. However, FTX warned that “PWP’s undertaking is subject to court approval”.
SBF’s replacement, CEO John J. Ray III, confirmed that FTX subsidiaries have solvent balance sheets, which could be sold or restructured to reduce losses. While pointing out that some subsidiaries, such as crypto exchange LedgerX, are exempt as debtors in the bankruptcy filing, he added:
“Either way, it will be one of our priorities in the coming weeks to explore sales, recapitalizations or other strategic transactions involving these subsidiaries and others that we will identify as we progress. work.”
In addition, FTX’s debtors have concurrently filed motions seeking interim relief with the bankruptcy court, which is expected to be heard on November 22, 2022. Although no sale or restructuring deadline has been set, Ray has requested all stakeholders “to be patient”.
On Nov. 19, the law firm assisting FTX and SBF amid bankruptcy waived representation for the contractor, citing conflicts of interest.
According to Paul, Weiss’ attorney Martin Flumenbaum:
“We advised Mr. Bankman-Fried several days ago after FTX filed for bankruptcy that disputes arose which prevented us from representing him.”
Flumenbaum believed Sam Bankman-Fried’s “relentless and disruptive tweets” had had a negative impact on the attorneys’ reorganization efforts.