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FTX’s Chapter 11 bankruptcy plan runs into problems at the U.S. Trustee's Office, which listed 10 objections Friday. These include excessive releases and failure to exclude an important Kroll data breach. The Office says that the plan should not be confirmed, as it funds FTX’s full discharge and releases a broad array of individuals connected with the estate. This contradicts recent U.S. Supreme Court cases, such as Purdue Pharma, on receiverships and nonconsensual third-party releases.

The plan is also objected to by the U.S. Trustee for allowing FTX to change terms without creditor approval until after voting begins. The supplement took effect, in calculating votes, and it is open to later alteration that could prejudice creditors as the filing notes.

Another point of concern is the plan's requirement that parties must opt in order to be notified by the trustee about future developments. This provision could mean that those affected will be left entirely in the dark as to how matters develop in future, at their expense possibly.

The plan promises that it will completely repay customers of the exchange and unsecured creditors holding $16.3 billion worth of claims. However, the U.S. Trustee says that FTX can't get a discharge because it is liquidating all of its assets and therefore does not qualify for heavy-duty relief in Chapter 7, amazon.

Additionally, the Trustee objects to provisions in the plan that release a wide range of individuals from duties, including officers employed by or affiliated with a now defunct corporation but also extending to others for post-effective date actions. They are not eligible for such shielding.

The Trustee also pointed out that the plan doesn't exclude the Kroll data breach, which affected over 78000 victims and is still being disputed in terms of related legal fees. The U.S. Trustee and a court-appointed fee examiner recommend that these claims not be borne of and estate, asking instead for the court to exclude them from any release in the plan.

Moreover, the Trustee has criticized the plan for shortchanging small creditors, who are to receive $1.19 per dollar of claim compared with $1.43 for larger creditors despite FTX's ability to pay both equally.

The final point of U.S. Trustee concern was FTX’s Chapter 11 petition filed in November 2022, after the collapse of its token and customer exodus. In March, former CEO, Sam Bankman-Fried, received 25 years in prison as sentence for embezzling over $11 billion.