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.
