Breaking News: FTX declares Chapter 11 bankruptcy restructuring, CEO SBF resigns, John J. Ray III takes over.
The exchange FTX announced bankruptcy reorganization at 22:14 in the evening, exercising Chapter 11 bankruptcy law, including FTX Trading, West Realm Shires Service, Alameda, and about 130 other companies forming the FTX Group. However, this does not include LedgerX, FTX Digital Market, FTX Australia Pty, and FTX Express Pay.
Table of Contents
What is Chapter 11 Bankruptcy?
Chapter 11 bankruptcy protection is a procedure that allows companies to reorganize their finances, fulfill obligations to creditors, and continue operating. Typically, a reorganization plan approved by creditors and supervised by legal teams is executed.
In July, the asset lending platform Celsius filed for bankruptcy protection, with over 100,000 estimated creditors and assets ranging from 10 billion to 100 billion USD, with a similar estimated debt amount. They plan to restructure financially to return assets to users. They believe that many well-known companies have successfully restructured under Chapter 11, becoming stronger, including American Airlines, Delta Air Lines, General Motors, Hertz, and Marvel, among others.
However, for the company to reorganize under Chapter 11 bankruptcy, Celsius needs to prioritize paying employee salaries and not harming their interests to obtain court approval for the restructuring. Therefore, Celsius is currently not allowing users to withdraw funds.
