FTX creditors oppose the bankruptcy reorganization plan, stating that cash payments will lead to additional taxes
ChainCatcher news, according to CryptoSlate, a creditor group led by Sunil Kavuri opposes the reorganization plan proposed by the FTX bankruptcy administrators. According to documents submitted to the court on June 5, the creditors pointed out that the plan did not pass the best interest test and contained terms that were not in the creditors' interests, while also ignoring property rights issues.The creditors stated that cash payments would result in customers needing to pay taxes on the cash received. They suggested using physical payments to avoid tax issues. The creditors further stated that FTX must update the disclosure statement regarding the settlement with the Internal Revenue Service (IRS). Under the settlement plan, the IRS will receive $200 million in priority claims within 60 days of approval. An additional $685 million in subordinated priority claims will be paid after customers receive full compensation.It is reported that on May 7, the FTX bankruptcy administrator announced the reorganization plan, under which creditors would receive full cash repayment. According to the plan, creditors with claims under $50,000 would be eligible for 118% compensation within 60 days of court approval. Other non-government creditors would also receive full compensation and up to 9% interest compensation.
