Kroll Steps In
In a bid to manage the chaos that is the FTX bankruptcy saga, the restructuring firm Kroll has been appointed as the claims and noticing agent. Set to serve as the watchdog over all claims against FTX and its 101 affiliated companies, Kroll’s job is to make sense of the financial debris left in the wake of FTX’s spectacular crash. This arrangement was officially announced on November 17, but it’s been in the works since November 12.
The Claims Database: Current Status
While you might imagine a bustling database filled with claims, the reality is slightly more underwhelming. As of today, the ledger shows only eight claims, one being from the Singaporean blockchain development firm Ethereal Tech, seeking a cool $11.7 million. So far, these claims add up to $40.9 million, which is just a drop in the bucket when considering FTX’s reported debts of around $8 billion. It seems like this database could potentially house thousands more claims as the saga continues.
Comparing to Other Cases
To add some perspective, let’s look at Kroll’s previous endeavor with rental giant Hertz, which dealt with a staggering 62,061 claims during their own Chapter 11 proceedings. So, if you thought eight was a lot, just wait for the floodgates to open.
Who’s Interested?
Kroll is maintaining a list of interested parties, but guess what? Customers aren’t on it—yet! Currently, about 750 entities, including banks, landlords, and the likes of Apple, JPMorgan, and even Stephen Curry, are in the loop about the developments. One can only imagine the conversations happening at the coffee machines at these firms as they keep tabs on the unpredictable cryptocurrency exchange landscape.
The Long Road Ahead for Creditors
Speaking of customers, it’s estimated that over a million creditors are somehow entangled in the FTX mess. Corporate securities attorney Margaret Rosenfeld weighed in, stating that don’t hold your breath for a quick payout. “You can’t make creditor distributions until these claims are analyzed,” she noted, emphasizing the long and winding road ahead. Just think of it like waiting for a delayed flight, but instead of snacks, you get to pick through the wreckage of a crypto exchange.
International Regulatory Quibbles
And if you thought this was all happening in a vacuum, think again. Regulators in the Bahamas are waving red flags about the validity of the Chapter 11 proceedings in the U.S. They argue that the appointed CEO lacks the authority to even file for bankruptcy concerning FTX Affiliates, which adds another layer of complexity to the already tangled web of bankruptcy law.
