The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

FTX’s Bahamian subsidiary will hold its first creditors meeting on March 15 at Baha Mar’s convention centre as its liquidators ramp-up efforts to return assets to their rightful owners.

A notice of the meeting said its primary purpose “is to establish a liquidation committee as required pursuant to Order 8 of the Companies Liquidation Rules 2012 in relation to the official liquidation of FTX Digital Markets.

“As part of the meeting the joint official liquidators will provide an update on the progress and conduct of the liquidation, together with information for customers and non-customer creditors regarding the claims process for FTX Digital Markets,” it added. All creditors of the Bahamian subsidiary, including investors and non-investors, are being invited to attend.

“With reference to Order eight and nine of the Companies Liquidation Rules 2012, a liquidation committee will be elected at the first creditors’ meeting, which shall comprise of not less than three, nor more than five, customers or non-customer creditors,” the notice added.

“Customers and non-customer creditors may express their interest in being appointed to the liquidation committee by making the relevant election in the electronic proof of debt and voting form .

“The liquidators will report on key aspects of the liquidation to the liquidation committee on an ongoing basis. Liquidation committee members will be required to attend regular update meetings and will have access to material non-public information. Committee members will be required to enter into customary non-disclosure agreements and may be restricted from trading claims against FTX Digital Markets.”

Brian Simms KC, the senior Lennox Paton partner, who together with two PwC accountants forms FTX Digital Markets liquidators, revealed in a January 12, 2024, affidavit that they seek a three-week extension to the date on which the first creditors meeting will be held.

“The potential customers and creditors of FTX Digital Markets with whom the joint official liquidators have been able to discuss the global settlement agreement are supportive of the joint official liquidators entering the global settlement agreement,” Mr Simms said in filings that form part of the trio’s bid for Supreme Court approval of their deal with John Ray, the FTX US chief.

“The joint official liquidators also seek an extension to the statutory 90-day deadline to hold the first creditors meeting due to the fact that the sanction application will be heard on January 22, 2024, and it is only after this application has been determined that the joint official liquidators will be able to circulate forms for proofs of debt that will include the option for customers to elect to prove their claim” in The Bahamas.

FTX creditors will also receive the necessary waivers “barring” them from seeking to claim twice in both The Bahamas and Delaware. The 90-day timeline to hold a first creditors meeting started running from when Mr Simms and the PwC duo were approved as official liquidators in early November 2022.

“As such, there will be insufficient time to hold the first creditors meet- ing by February 8, 2024,” the senior Lennox Paton partner said. “The joint official liquidators therefore request an extension to February 29, 2024, to hold the first creditors meeting.

“As of January 9, 2024, the joint official liquidators have received a total of 60,933 notices of intention to file a claim through the creditor portal launched on December 13, 2022. Given the time sensitivity of the instant application as set out above, and the amount of notice of intended claims lodged to-date, the joint official liquidators are unable to convene a meeting of creditors.”

This also extends to holding a vote on whether FTX Digital Markets creditors approve the deal with Mr Ray or the selection of a creditors’ committee. “The fact that the potential customers and creditors span the length and breadth of the globe creates further difficulties,” Mr Simms added.