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FTX debtors and UCC clash over asset control in restructuring

Published 08/10/2023, 09:36 AM
Updated 08/10/2023, 11:40 AM

FTX debtors, led by CEO and chief restructuring officer John J. Ray III, have expressed disapproval of traders and market makers within the Official Committee of Unsecured Creditors (UCC) who are aiming to gain authority over assets. They believe the UCC’s plan to invest nearly $2.6 billion in cash reserves in short-term Treasurys is a bad idea amid the FTX 2.0 draft restructuring plan.

In a court filing dated August 9, FTX issued a response to the UCC’s commentary regarding the reorganization and term sheet proposal. FTX strongly criticized the UCC’s pursuit of asset control, particularly as it recommended that debtors allocate nearly $2.6 billion from cash reserves into short-term Treasurys, aiming to cover professional fees amounting to as much as $330 million.

Screenshot of the debtors’ response to the UCC. Source: Court Listener

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