FTX plans to allocate $230 million to compensate preferred shareholders, and the confirmation hearing for the restructuring plan will take place on October 7

ChainCatcher news, according to The Block, based on a newly disclosed agreement, FTX debtors will allocate up to $230 million from the proceeds of government seizure actions to compensate preferred shareholders. The finalization of this agreement after the deadline for FTX creditors to vote on the claims plan, and its announcement 30 days later, has surprised and angered some creditors. Before the voting deadline on August 16, creditors overwhelmingly approved the FTX restructuring plan, but they were unaware of this provision. Although shareholders typically receive compensation last in bankruptcy proceedings, FTX debtors stated that compensating preferred shareholders would help avoid high litigation costs and delays associated with the seized proceeds.

Additionally, according to the latest FTX bankruptcy filings, the claims plan has not yet been approved by the court. The next court hearing to confirm the restructuring plan is scheduled for October 7, 2024. If the plan is approved, creditors with claims under $50,000 may begin to receive compensation by the end of 2024. Those with larger claims may have to wait until the first or second quarter of 2025 to receive compensation.