FTX creditors poised to receive $5B by May 30 in latest distribution round

FTX Recovery Trust will begin distributing over $5 billion to creditors on May 30 as part of the company’s Chapter 11 Plan of Reorganization, according to a May 15 statement issued by the Trust. Holders of allowed claims in both Convenience and Non-Convenience Classes who have completed the required pre-distribution steps will receive the funds. The distribution marks the second official payment round since FTX entered bankruptcy proceedings. It will reach eligible claimants through designated Distribution Service Providers, BitGo and Kraken, within one to three business days of the release date. ‘Important milestone’ in recovery process FTX Recovery Trust Plan Administrator John J. Ray III said the distributions mark a key step in executing one of the most complex creditor payment operations to date, given the breadth of the creditor base. He added that the first non-convenience class distributions are “an important milestone for FTX,” crediting professional recovery teams for navigating the large-scale coordination effort. The May 30 payouts follow an earlier round of distributions that began in February for smaller creditors. Under that initial phase, claimants with approved amounts under $50,000 began receiving full reimbursements and 9% annual interest accrued since the bankruptcy filing in November 2022. Customers who onboarded with either BitGo or Kraken as their selected provider will receive their payments directly from these platforms. By onboarding, customers waived their right to receive direct cash distributions from FTX and instructed the firm to remit funds to their chosen provider. The Trust will disclose future payment dates as the process continues. Breakdown of distribution percentages According to the terms outlined in the reorganization plan’s payment hierarchy, Class 5A Dotcom Customer Entitlement Claims will receive a 72% payout, while US-based Class 5B Customer Entitlement Claims will receive 54%. Class 6A General Unsecured Claims and Class 6B Digital Asset Loan Claims will receive 61%. Class 7 Convenience Claims, which typically cover smaller claims, will be paid out at 120%. While the first wave fully repaid small creditors, those with claims above $50,000 are scheduled to receive distributions through upcoming rounds. A total of $16 billion has been allocated for repayments. Some creditors have voiced frustration with the wait, though bankruptcy filings indicate that the estate recovered more than initially projected, enabling broader and deeper repayment efforts than originally anticipated. Source: https://cryptoslate.com/ftx-creditors-poised-to-receive-5-billion-by-may-30-in-latest-distribution-round/