FTX has filed court documents requesting the exclusion of its Dubai unit from the ongoing wind-down proceedings in the United States. The exchange, which filed for bankruptcy in the U.S. in November 2022, initiated Chapter 11 cases for 102 associated entities worldwide, including FTX Dubai, established in February 2022 and owned by the company’s European arm.
In the recent court filing, the bankrupt estate argued that FTX Dubai did not conduct any business in the United Arab Emirates (UAE) before the bankruptcy filing and, therefore, has no reasonable likelihood of rehabilitating its operations. The filing also highlighted that FTX Dubai’s balance sheet is solvent, suggesting that a solvent voluntary liquidation procedure in accordance with UAE laws would allow for a timely distribution of the positive cash balance after settling all liabilities and liquidating assets.
While the estate asserts that any court orders involving FTX Dubai during the proceedings should stand, it argues that the dismissal request is necessary to protect the debtors and authorize them to fulfill obligations, such as paying pre-bankruptcy wages, salaries, and other compensation, benefits, and expenses to Dubai employees.
As the legal proceedings continue, stakeholders are keen to see how the situation evolves and how the exclusion of FTX Dubai from the bankruptcy proceedings might impact the overall wind-down process.
FTX Customers Express Disappointment Over Draft Bankruptcy Exit Plan
FTX’s Official Committee of Unsecured Creditors (UCC), representing the interests of FTX customers, has expressed its “extreme disappointment” with the exchange’s draft bankruptcy exit plan. According to a court filing on July 31, the UCC claims that despite repeated requests and previous assurances, the FTX restructuring team did not engage in any calls or meetings to discuss the draft Chapter 11 plan.
The draft plan aims to categorize customer claims into classes and lays out a pathway for FTX to re-launch as an offshore exchange. However, the UCC has warned that if its concerns continue to be ignored, it will present its own plan for FTX customers to vote on.
As the situation unfolds, stakeholders are closely monitoring developments and the potential impact on FTX’s restructuring and future operations. The involvement of the Official Committee of Unsecured Creditors adds another layer of complexity to the bankruptcy proceedings, raising questions about the overall direction and outcome of the process.
